This voice must be neutral effective and fast

The "think tank" Eurofi organizes tomorrow and day after tomorrow in Nice symposium where he progresses a whole series of proposals for financial integration of Europe. Here, its leaders present their tracks in financial supervision.

The current financial crisis reflects the strong cross-border spread of risk. Europe is not the origin of the American crisis of the "sub-prime". She suffers yet the consequences insofar as its financial institutions maintain activities in the world. The current turbulence also show how the "procyclicality" of prudential and accounting rules accelerates the development of the new homes of risk. The crisis finally shows the speed of developments in the trades of the finance and business models", which is default regulations. Securitization has indeed contributed to the development of a wide parallel banking system outside the control of supervisors who played a key role in the crisis.

In this context, the crisis highlights the limits of the supervision of financial groups on a national basis, "solo". As cross-border financial players are more and more highly integrated, centralized operation both strategic and commercial point of view of risk and cash management, it is the seat of the group are developed growth strategies, planned future profit sources, determined the choice of innovations and identified the corresponding risks. Supervision fragmented country does so more supervisors of the countries where these groups have subsidiaries ensure an adequate control or effectively protect their depositors.

That is why the deployment of an integrated European supervision is essential to better prevent crises and ensure real protection of European customers of bank groups or insurance. This deployment requires a prior political agreement at the European level, on principles to provide answers to both legitimate Member States requirements and those financial institutions. These principles could be the following.

1. The European supervisors should implement harmonised prudential legislation, that is transposed consistently by the 27 Member States.

(2) The supervisor of the parent or the European consolidation entity ('group supervisor') with construction of the picture on the solvency and liquidity of the group, he would return him to set the adequate level supervisory requirements both of the Group of each of its European settlements.

3 The Group supervisor should systematically and in a timely manner give supervisors, national access to necessary information, in particular when local activity of the group is significant to the financial markets of the countries considered; the information provided should enable them to assess creditworthiness and more generally the risk profile of institutions subsidiary or branch operating within their national territory. To this end, the Group supervisor should have the responsibility to establish a college gathering other supervisors of the group. The Group supervisor would chair the College which would also be the coordinating body of supervisors. Supervisors of subsidiaries (supervisors "hosts") would remain in charge of the daily monitoring, in particular, compliance with national provisions for the protection of consumers for which they are the best qualified.

4. The mandate of the supervisors of a group should be common. It should have a European dimension and attach to the protection of the interests of all depositors or policyholders Europeans. This mandate should include, in addition, an obligation of timely information of the various authorities involved in the search for financial stability, be they national (ministries of finance, national central banks...) or European (ECB, Ecofin Council,...).

5 "Hosts" supervisors should be able to adapt their own monitoring and control procedures to the specificities of each cross-border so as to enable the supervisor group associated with a coherent and optimized approach control and the monitoring thereof.

6. In the case of disagreement on the assessment of risk or potential competitive imbalances, supervisors of the host country should have a way to appeal against a decision of the Group supervisor. This voice must be neutral, effective and fast. This would help address the concerns of the "hosts" States that are home to many foreign institutions or financial institutions carrying on a domestic basis. In this regard, the European banking supervisors (CEBS) and insurance (CEIOPS) committees should be able to issue opinions to resolve these conflicts.

7. The impacts in terms of competition and financial stability of the prudential provisions taken by different colleges, the efficiency of monitoring and control practices deployed by them and finally the degree of consensus achieved within them must be examined regularly by CEBS and CEIOPS; they should report to the institutions of the Union.

A real taking account of the lessons of the crisis is necessary to ensure the emergence of a consensus in the Ecofin Council for the adoption of these guidelines.