Local view for "http://purl.org/linkedpolitics/eu/plenary/2015-04-28-Speech-2-906-000"
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"en.20150428.41.2-906-000"2
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"Madam President, Commissioner Hill – the Council is absent – colleagues, tomorrow we vote on a critical piece of financial legislation: the regulation of money market funds (MMFs). This is a EUR 1 trillion industry too big to be ignored. The financial crisis has made it abundantly clear that these funds pose systemic risks and can lead to financial instability and recourse to the public purse. During the crisis, the key vulnerability was when investors wanted to liquidate funds quickly. These so-called runs meant that the asset managers had to close them down and the investors lost their money.
The previous Parliament failed to find an agreement on this file. From the beginning, when I took over, it was clear to me that this was an issue that strongly divided this House. Between the supporters of the CNAV MFF and the VNAV MFF, each camp has about 50% of the market, and is supported by at least one Member State and opposed sometimes by another – a bit like when you have two strong football teams in one city.
The divisions experienced in this House are also mirrored in the Council. Therefore, I would like to remind colleagues that it is not our role as legislators to decide which team we should be supporting. Both have their value to different investors. Our role is to ensure that any type of MMF is transparent, liquid and stable so that we do not face the burdens of the 2008 financial crisis again, while recognising that MFFs are of value to many types of businesses, local authorities and non-profits that support our economy and use MFFs as a cash management tool. Salaries and other funds are placed in MFFs as these offer an easy return both in terms of interest and of liquidity. They can, and do, make a positive contribution to the real economy.
However, it would be an understatement if I said that achieving a degree of understanding of each other’s point of view was straightforward when we looked at this report. But I am pleased that we did manage to find a compromise between the S&D, the EPP and ALDE in the Committee on Economic and Monetary Affairs. What we have achieved, apart from strengthening the viability of the MFF sector, is to introduce three new categories of funds – LVNAV, Retail CNAV and Public Debt CNAV. These solutions would not have been possible had it not been for the cooperation and flexibility demonstrated by many colleagues and especially the shadow rapporteurs.
However, I have to say that I am disappointed that, despite taking many concerns of the GUE/NGL, the Greens and the ECR on board, that they did not support the proposal in committee. I do find it ironic that their preferred positions, for whatever reasons, would result in a totally unregulated MFF sector being allowed to continue, which would put our fragile economic recovery at risk. I do find this baffling. For me it is important to get this on the statute books sooner rather than later. Therefore, I would urge them to reconsider their positions and support this report so we can move to a trilogue stage from a greater position of strength.
On that, I would also say to the Council Presidency – which is absent – that it is being made an offer that it cannot refuse in terms of achievements for the Latvian Presidency. I would thus ask Commissioner Hill to take this up with the Presidency to ensure that it does move forward quickly. I would also like to take this opportunity to thank the earlier Italian Presidency, which made considerable progress on this dossier and was instrumental in introducing me to the concept of LVNAV."@en1
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