In a joint appeal, representatives of Europe's major banks and financial industry players called for progress on supporting transnational financial groups in the event of failure.
The appeal comes as the European Commission is drafting new detailed rules for EU-wide financial supervision, after having been given the go-ahead by member states to do so last June. New draft legislation is expected in the autumn.
The joint call was signed by the European Banking Federation (EBF), the European Federation for Retirement Provision (EFRP), the European Private Equity and Venture Capital Association (EVCA), the Federation of European Accountants (FEE), the Federation of European Securities Exchanges (FESE) and BusinessEurope.
It underlined that "to further enhance the effectiveness of cross-border oversight and trust-building amongst supervisors, progress will be needed on cross-border early intervention and common burden-sharing criteria in the event of a crisis and lender of last resort situations".
Although EU leaders managed to agree on the basic principles of increasing and harmonising micro- and macro-prudential supervision across the continent, they remained reluctant to address the problem of how to bail out banks or insurance firms with a trans-European reach in the event of a collapse.
Last autumn, financial giant Fortis found itself in deep trouble due to its exposure to so-called toxic assets. The group needed a hasty injection of public money, which was eventually granted by the governments of Belgium, the Netherlands and Luxembourg.
The bailout apparently worked, and ended with the group being broken up and partially sold to French bank BNP Paribas. However, rather than the result of transparent and clear rules, the outcome was the culmination of horse-trading among sovereign states which were fortunate enough to share similar principles and interests in saving the cross-border group.
Should banks operating in EU countries with different agendas find themselves in a similar situation, such a positive outcome would be far from guaranteed, posing a threat to investors and the soundness of European financial markets as a whole.
This risk explains the financial community's broad interest in overcoming national interests.
However, difficulties remain regarding the issue of who will pay what, and the industry itself acknowledged that "respect of national fiscal responsibilities" is a principle that must not be attacked.
