European control on financial institutions: Bank Guarantees 57/68?
Tuesday, June 2, 2009 @ 10:08 AM
“It must to be now or never”, said the President of the European Commission, José Manuel Durao Barroso, asking for a reform of the financial supervision system in order to prevent future crisis. The EU executive presented their proposals to correct failures of the current model of supervision, among which it is most highlighted the creation of an European monitoring body whose mission will be to detect risks.
The plan will have to be approved by the 27 at the summit that will be held this month as a first step to boost the changes promised by governments in the April London G-20 meeting.
According to Brussels, the monitoring body," the European council on systemic risks", will be directed by the European Central Bank (ECB), and the governors of central banks of European members will be part of it. Some representatives from National supervisors and the European Commission. Its mission will be to alert of any risk that may be detected, and, to make recommendations if a threat were found. .
Another proposal by Durao Barroso has been the supervision of cross-border banking groups. He stressed that it is not a “centralization of power”, but an improvement of coordination among supervisors.
Now: What would you suggest?
My take: Stricter regulations on off-plan properties financing, specially on the 57/68 Bank Guarantee and related liabilities of Financial institutions and developers.
By Maria L. de Castro
web@costaluzlawyers.es
www.costaluzlawyers.es
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