Cicero Policy Briefer

Issue 20, January 2008

The credit crunch has bitten Brussels

By Iain Anderson

It was only a couple of months ago that I hastily opined in this briefing that the European financial services sector should make the most of current Internal Market Commissioner Charlie McCreevy, as he was the man most likely to stand out against a single European financial super-regulator.

However, it seems the chill winds of sub prime, Northern Rock and the credit crunch more generally are making McCreevy think again. While he is not proposing a massive extension of powers, he is certainly starting to open the door towards change.

In his recent speech to the Eurofi conference in early December, McCreevy's words showed this marked change in his comments on the creation of a single regulator. He said: "I am not coming down on one side of the argument or the other…However, I do agree strongly that we cannot let the present system continue as it is."

Specifically, McCreevy is now calling for a College of Supervisors for each cross-border banking group. He argues that the current model for Euronext and LIFFE and the current informal arrangements under CEBS are worth pursuing. “A College of Supervisors would be easier to achieve than an EU supervisory body," he said.

We know there is already a review of the Lamfalussy Process in place—but I feel McCreevy has now given the nod towards a quickening in the pace of change.

For the first time, he has opened the door. Expect others to keep it ajar.

Iain Anderson can be contacted on +44 (0)20 7665 9532 or click here to email.

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