EU Readies Super Financial Authority to Control Member Nations’ Financial Affairs
The European Union is about to introduce three new super-regulatory bodies to monitor all member states’ financial matters under the guise of “preventing another crisis”, it has been announced.
The EU will present its master plan for full financial monitoring at a European Commission meeting in Brussels on 23 September.
The proposals will see a “European Systemic Risk Council” created at the European Central Bank. This body will be tasked with “identifying emerging dangers and serve as an early warning system for Europe’s markets.”
Three other new agencies are also planned for controlling banks, stock markets and insurance companies.
Banks will be monitored by a London-based European Banking Authority (EBA), while trade in securities will be controlled by a Paris-based European Security and Markets Authority (ESMA). Insurance and pension funds would be reviewed by a European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt.
The EU hopes that these authorities will be fully operational within two years, and will be allowed to issue direct orders if they feel that national supervisory authorities are not acting decisively when a financial institute runs into trouble.
The primary excuse for the creation of these bodies is that they will prevent the wild excesses of financial institutions which led to the current financial crisis which precipitated the global economic slump.
According to the plans, the European controllers would be given the right to directly intervene in financial markets. In reality this means that the EU will soon be able to determine internal financial controls of its member nations as well.
The Lisbon Treaty — set to be introduced early in the new year, will already make provision for many centralised functions originally reserved for member nations. These include foreign policy, defence and immigration matters.
The proposed regulations allow for member states to contest any decisions, but the final decision in all such disputes will lie with the EU finance minister or the European Commission.
Observers point out that once these new measures are in place, there will be almost no powers of any significance left for national parliaments to exercise.
