Consolidated supervision row brews

BRUSSELS -- European financial services associations are furious that the compromise text produced by the European Council on December 7, 2004, for the capital requirements directive (CRD) did not modify the European Commission’s proposals on consolidated supervision. The issue is expected to become a key lobbying point for associations when the European Parliament takes up debate on the bill in September.

The European Banking Federation (FBE) -- an organisation formed of European banking associations -- issued a strongly worded letter to internal markets commissioner Charlie McCreevy at the end of January on the subject of consolidated and co-ordinated supervision of banking groups by home regulators in EU countries. Banks favour consolidated supervision because it will dramatically lower their compliance costs.

"The current CRD proposed by the Commission lays some of the groundwork necessary for