EU Financial Watchdogs Need Money and Power, U.K. Lawmakers SayBen Moshinsky
The European Union’s banking and markets watchdogs need more money and power to help prevent another financial crisis, lawmakers in the U.K.’s House of Lords said.
The European agencies responsible for writing financial rules are “hampered by several fundamental weaknesses, including a lack of authority” and “inadequate funding and resources,” according to a report by the House of Lords’ EU committee published on Feb. 2. The report also called on the U.K. government to boost its influence in the financial services rule-making process.
The regulators “need to be better equipped to do their job -- they need more power, more resources and an effective legal basis on which to take action,” committee member Lyndon Harrison said in the statement. “Without these improvements, the risks of another financial crisis are greater.”
The EU set up three agencies in 2011 to harmonize banking, markets and insurance rules across the 28-nation economic bloc in response to the 2008 financial crisis. Proposed budget cuts would “severely undermine” the ability of the watchdogs to perform their duties, the chairmen of the three regulators said in a statement in November.
The committee criticized the introduction of a cap on EU bankers’ bonuses, saying the measure “runs the risk of being disproportionate in its application and economically damaging.”
The Lords also said a so-called capital markets union “presents a golden opportunity for the U.K. to promote the importance of capital markets.”