Interview: Financial turmoil poses new challenges for regulators[fr][de] 

The current financial turmoil has shown that troubles can easily spread across international markets, posing a major challenge for supervisors and regulators. Jörg Decressin, division chief at the International Monetary Fund's (IMF) European Department, thinks that one of the lessons to be drawn from the crisis is already encouraging further international co-operation.

"Regulators and supervisors need to collaborate much more and much more information exchange is necessary in order to be on top of these events," Decressin said.

In response to the crisis, some EU leaders, including German Chancellor Angela Merkel and French President Sarkozy have spoken out in favour of more transparency and supervision in financial markets. While there is broad consensus on transparency being "crucial for markets to operate in an efficient manner", the question of how to structure supervision is a much more difficult one.

Currently, supervision is an issue for the member state's authorities, however, the IMF argues in favour of joint accountability and responsibility at EU level. "This would ensure that supervisors duly take into account the external effects of their own actions on other countries, which will occur due to the integration of the financial market," Decressin explains. "As to how to reach this joint responsibility and transparency, I think that there are many ways to go," he adds.

Meanwhile, with the retail banking market being the least "Europeanised" sector in the EU, there are still many challenges ahead for market integration. "There is still a long way towards more integration to go before we hit limits," financial expert Decressin holds. But he says consumers should should eventually benefit from continued Europeanisation, including on the mortgage market, which today remains largely national.

"What integration of the retail market should achieve is additional variety, so that there is more choice for customers."

To read the full interview, please click here.