Einde inhoudsopgave
Cross-border Enforcement of Listed Companies' Duties to Inform (IVOR nr. 87) 2012/2.5.2
2.5.2 Crisis and de Larosière-report:• shortcomings in financial supervision
mr.drs. T.M.C. Arons, datum 07-05-2012
- Datum
07-05-2012
- Auteur
mr.drs. T.M.C. Arons
- JCDI
JCDI:ADS367236:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Significant examples: the Icesave case where the Dutch and UK financial supervisors as host competent authorities did not have the power to force the Icelandic supervisor to take action towards the parent company of Icesave, Landsbanki; the Fortis case where the Dutch and Belgian financial supervisor could not agree on the policy to save the Fortis-holding from bankruptcy. In the end, the Dutch and Belgian govemment were compelled to nationalise Fortis.
Report of The High-Level Group on Financial Supervision in the EU, Chaired by Jacques de Larosière, Brussels, 25 February 2009 ('De Larosière Report').
De Larosière Report, No. 149-150, pp. 38-39.
De Larosière Report, No. 155-159, pp. 40-41.
De Larosière Report, No. 162, pp. 41-42.
The 2008 financial crisis exposed the failures of the current system where there is no power to force an agreement between national supervisors.1 The failure to co-operate effectively between the national supervisors is considered to be one of the causes that ultimately led the national governments to bail-out certain banks that were in trouble at the national taxpayer's expense. In February 2009, the High-Level Group on Financial Supervision in the EU, chaired by Jacques de Larosière ("The High-Level Group"), reported,2 among others, on the weaknesses in the current structure of EU financial supervision contributing to the financial crisis.
First of all, the de Larosière report states clearly the objective of financial supervision: to ensure that the rules applicable to the financial sector are adequately implemented in order to preserve financial stability and thereby to ensure confidence in the financial system as a whole and to provide for sufficient protection for the customers of financial services. The function of supervisors is to detect problems at an early stage to prevent crises from occurring. Competition distortions and regulatory arbitrage stemming from different supervisory practices must be avoided because they have the potential to undermine financial stability by encouraging a shift of financial activity to countries with lax supervision.3
The High-Level Group detected the following shortcomings in the supervisory structure:
(a) the national supervisors failed to adequately perform their responsibilities;
(b) the financial supervision system did not provide adequate tools to challenge the decisions of a national supervisor;
(c) the peer review arrangements to be performed by the Committees as part of their duties proved to be ineffective;
(d) there was over-reliance on judgments and decisions of the home supervisor;
(e) when the financial crisis developed, national supervisors were not prepared to franldy discuss and inform the other host supervisors at an early stage on the vulnerabilities of financial institutions which they supervised;4
(f) the necessary mutual confidence between the supervisors eroded because either there was not sufficient exchange of information or the host supervisor lost confidence in the reliability of the information provided to it by the home supervisor;
(g) the Committees did not have the authority to take urgent common decisions binding on all supervisors.5