The European Commission is launching a consultation on the improvement of supervision for the financial services sector. Following the report of the high-level group on financial supervision in the EU chaired by Jacques de Larosière, published on February 25th 2009, the Commission intends to come forward by the end of May 2009 with a Communication setting out its proposals on the future of the EU supervisory architecture followed by specific legislative measures in autumn 2009 . Before doing so, it wishes to take into account the views of all interested parties.

In its Communication of March 4th 2009 for the Spring European Council, entitled "Driving European Recovery", the Commission endorses, and asks EU leaders to endorse, the key principles set out by the de Larosière Group. This mandate to follow  the conclusions reached by the Larosière Group, was already in the Commission's agenda as one of the elements in its work programme for year 2009.

Many of the Group's recommendations for regulatory repair contribute to a growing consensus about where changes are needed, reflecting issues raised by key actors including the European Parliament.

The Commission has already taken concrete initiatives in areas such as credit rating agencies; insurance; revision of capital requirements under Basel II; securitised products; mark-to-market accounting rules and addressing pro-cyclicality of regulatory measures. Industry has acceded to the Commission's request to move Credit Default Swaps on European entities and on indices of European entities onto a central clearing platform established, regulated and supervised in Europe by July 31st 2009. In other areas, such as the regulation of hedge funds and other non-bank investment actors, transparency of derivatives markets and improved accounting rules, Commission proposals will be brought forward as a matter of priority in the coming months.

According to the Commission, the Group's recommendation on the need to develop a harmonised core set of standards to be applied throughout the EU is of particular interest. Key differences in national legislation stemming from exceptions, derogations, additions made at national level or ambiguities in current directives should be identified and removed. The Commission will therefore launch an important new initiative in this sense. The Group's findings on sanctions regime also point to the need for a new push on this front.

The Commission now calls for a supervisory system combining stronger oversight at EU level with maintaining a key role for national supervisors. It backs the Group's proposal to set up an early warning body under ECB auspices to identify and tackle systemic risks.

In May 2009, the Commission will put forward to the June European Council a detailed plan for revising the European financial supervisory architecture based on the de Larosière report. It intends to bring forward legislative proposals on the new supervisory framework in the autumn.

Before making its proposals, the Commission invites any interested parties to submit their comments on the proposals on financial supervision made in the “de Larosière report” and in the Commission Communication of March 4th 2009. All contributions should be sent, by fax (+32.2.2955552), by e-mail, or by post to:

European Commission
DG Internal Market
Unit G1 – Consultation on Financial Supervision
B-1049 Brussels.

Comments should be submitted by the April 10th 2009.