De Larosière report backs calls for a European regulator
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Although the report falls short of proposing a single European regulator, which the group maintains would not garner sufficient political support, it recommended the creation of a new body - a European Systemic Risk Council - under the auspices of the ECB to develop policy and provide warnings relating to systemic risk and financial stability to EU supervisors. The report also proposes establishing another body - the European System of Financial Supervisors - to co-ordinate the decentralised network of supervisors monitoring individual institutions and markets, leaving day-to-day supervision to member states.
The De Larosière report envisages that these new authorities could be created from three existing committees: the European Banking Authority, the European Insurance Authority and the European Securities Authority, which already attempt to co-ordinate national regulators. However, the report calls for this new body to be given extra powers such as imposing legally binding mediation and the ability to supervise specific large cross-border EU financial institutions.
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