Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-07-10-Speech-2-060"
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"en.20070710.6.2-060"2
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"Mr President, in drafting this report for the European Parliament, I have wholeheartedly congratulated Commissioner McCreevy and his predecessor, Mr Bolkestein, on the success of the financial markets legislation and regulation and the executive work of the European Commission in this respect. We have no disagreements about that. We may differ, though, with respect to the assessment of further steps and the priorities for the follow-up.
I think this is linked to a difference in perspective. For me, it is not enough just to look at the success of this financial sector as such. I see this sector as instrumental, and want to assess whether it provides the right infrastructure for economic growth, wealth and well-being. That is why in my report I focus first on the strategic question of who is profiting from this success.
Are end users profiting to the same extent as the few large multinational financial conglomerates that have acquired dominant positions at the top of the financial markets? Who is profiting most from the increased liquidity in the markets? Is it KKR, Blackstone and the other private equity firms that do billion-dollar deals, or is it the companies that are covered because they see credit ratings tumble down to junk status? Do entrepreneurs still dare to invest in long-term research and development projects for the development of innovative new products and services, or are they squeezed in ever shorter cycles of financial planning and reporting? Is the huge increase of complex financial products derived from the traditional bonds and equities really leading to a better allocation of capital, or does it contribute mainly to greater speculative profits for the hedge funds that master the rules of the pyramid game? Are citizens in the recently-acceded Member States better off now with the invasion of foreign banks and insurance companies in their countries, or are they confronted again with monopolistic structures that only provide them with standard, mediocre-quality products at prices higher than in the countries where they have their headquarters?
These and similar questions seem to me to be fundamental to answering the question of what kind of follow-up is required, and the first preliminary message in my report is thus to make more in-depth economic analysis about that.
I shall turn now to the priorities outlined in my report. The first message deals with one of my great concerns, the enormous market concentration at the top of the market, with 30 to 40 major cross-border financial players and a high concentration in several Member States. In the competition report that we adopted at the last part-session, we voiced our concerns and suggested that Commissioner Kroes put on her list of possible enquiries and further investigations the activities at the top of the financial market of investment banks, credit rating agencies, accounting firms, etc. We repeated this suggestion to her last week.
The second issue is the financial stability risks of these new developments of alternative investments – hedge funds, private equity. I do not have to go into detail there because the papers daily show that there are currently more concerns at the developments. Prudential supervisors, central banks, the ECB and our counterparts in the USA, whom we will visit next week, also raised these concerns and I think it is high time that we dealt with these risks.
The third issue is the retail markets. My answer to the lack of integration at the retail side is not just to overhaul this system and open up the borders but to make a more precise focused strategy, particularly for mobile users, who have a real need in terms of accessing and working with service providers in different Members States, so that could be more of a stimulation for pan-European financial products such as the pension product that was presented some weeks ago by the European Banking Federation.
Demand for microcredit is an important issue, as are pension systems, access to basic services, financial education and stronger consumer input and, finally, better regulation and the future architecture of supervision. On this issue, I think the main difference is that your mantra is ‘less is more’, as you said last week. We think that we need a focused regulation. As regards the architecture of supervision I would say that it will be high time to discuss the future architecture in the autumn and not just wait and see what will happen, although there are a lot of good developments."@en1
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