Calls for an EU banking regulator gather steam

BRUSSELS - Recent turmoil in the financial markets has strengthened the debate in the European Union about the security of its financial market, with some calling for greater transparency and better risk management to help avoid further crises. The US subprime debacle claimed its first UK victim this month, following similar failures in Germany, and questions are being asked about the robustness of the pan-European financial market.

In a recent paper entitled: Is Europe ready for a major banking crisis?, research fellow Nicolas Véron at Brussels-based think tank Bruegel suggests the current regulatory and supervisory environment is not prepared to deal with the failure of a major cross-border bank. He argues for a new EU agency to be created to deal specifically with crisis management in the pan-European banking market.

"The proposal is to create an institution at EU level that would be able to supervise a limited number of