EU finance ministers meeting in Luxembourg on 9 October agreed a 15 month 'roadmap' to examine whether financial rules need to be changed in order to improve the way cross-border banking crises are handled in the future and avoid a repeat of this summer's market turmoil.
The programme focuses on four aspects:
- enhancing transparency, especially relating to complex financial instruments, notably by looking into banks' mandatory disclosure rules;
- improving the way investments are valued, by agreeing on common standards;
- reinforcing supervisory mechanisms, through better information-sharing between national authorities and the development of cross-border cooperation agreements, and;
- improving market functioning, with a particular focus on credit rating agencies, which are accused of potential conflicts of interest, because they are paid as consultants by the very banks whose debt they rate. The issue is also likely to be raised at a meeting of the G7 major industrialised nations on the situation of global financial markets on 19-22 October.
EU ministers also called for a common framework for defining whether a banking crisis should be considered as "a serious disturbance for the economy" and invited the Commission to give fast-track treatment to reviews of whether government bailouts constitute illegal state aid so as to limit the broader impact.
