The European Commission on Wednesday unveiled a plan to better supervise banks in order to prevent a recurrence of the ongoing financial crisis.
"Better supervision of cross-border financial markets is crucial for ethical and economic reasons," said Jose Manuel Barroso, the commission president.
"The commission is making proposals today to help restore confidence, guard against future crises and protect growth and jobs," he added.
The commission proposed establishing two pan-EU bodies to correct what it sees as large regulatory weaknesses.
The plan would establish the European Systemic Risk Council, made up of central bankers and national regulators, to monitor any buildup of risks and issue a call for action before they threaten the stability of the financial system as a whole.
The European Central Bank would host and chair the council.
"By providing analysis, issuing early warnings of system-wide risks and, where necessary, recommendations to deal with these risks, the new body would for the first time equip the EU with a pan-European macro-prudential supervision system," said Joaquin Almunia, the EU economic and monetary affairs commissioner.
A supervisory group also would be formed to monitor the insurance, banking and securities markets. The group would consist of a network of national financial supervisors and new European authorities.
The plan will now go to a summit of EU leaders in June for endorsement. The commission will advance draft laws later this year and wants the regulatory system in place by the end of 2010.
Source: Xinhua
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