Money matters

20 May 2009

The excitement is building in Brussels. On May 27, in follow up to the G20 Summit, the European Commission will present its solution to the financial supervision failings that allowed the banking crisis, writes Stephen Gardner. According to Commission president José Manuel Barroso, this will largely be based on a supposedly independent report by elderly French former central banker, Jacques de Larosière. The Commission's register states that de Larosière's advisory group is composed of "academics", but this is not quite true. In fact, the group is made up of bankers and regulators, including Sir Callum McCarthy, who was Chairman of the Financial Services Authority between 2003 and 2008. As McCarthy left the FSA in the wake of the Northern Rock failings, he might seem an odd choice to advise on the future of financial supervision in Europe. And this impression might be reinforced by the information-gathering meetings held by de Larosière's group – all were with, er, bankers and regulators. So plans for beefing up EU supervision of banks can be expected to go the way of other items on the G20 agenda, such as tax havens – not a lot of beef, but a lot of expelled methane. In the interests of soft soaping the financial industry there will be talk about "supervisory consistency" and "enhanced cooperation," meaning regular opportunities for regulators to jet across the continent meeting each other, but little in the way of actual regulation. Plus ça change, as the Eurocrats say. A version of this article was published in Private Eye.

 

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