A3-0094/94

Resolution on the supervision of commercial banks and financial institutions and monetary stability

The European Parliament,

-having regard to Rule 148 of its Rules of Procedure,

-having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy (A3-0094/94),

A.whereas the strengthening of prudential supervision is essential to ensure the monetary stability of the European financial system,

B.whereas significant harmonization has already been achieved with regard to prudential supervision on the basis of the sovereignty of the Member States,

C.whereas, despite the liberalization of capital movements and financial services, national financial markets are still relatively segmented owing to the existence of national currencies,

D.whereas the transition to a single currency at the third stage of EMU and the setting up of a single financial market will do away with what remains of this segmentation and create a new situation with regard to prudential supervision,

E.whereas the Treaty on European Union has laid down provisions concerning prudential supervision during the second and third stages of EMU,

1.Recalls that effective prudential control is essential in order to ensure the proper operation and stability of financial markets and for the purposes of consumer protection;

2.Considers that the existing harmonization of rules on the supervision of financial institutions at Community level has shortcomings and that national supervisory bodies are experiencing increasing difficulty in carrying out their responsibilities because of the changes that have taken place in the financial and money markets over recent years;

3.Notes that the integration of European economies, including financial markets and services, will necessitate greater cooperation between national supervisory bodies at the second stage of EMU;

4.Believes that the creation of a single currency at the third stage of EMU will, for it to be able to safeguard monetary stability, require a more complete harmonization of the rules on supervision and the introduction of definitely stricter rules;

5.Notes that, at present, the procedures, structures and degree of prudential supervision still differ appreciably from one Member State to another;

6.Emphasizes that pragmatism and caution characterize the provisions contained in the Treaty on European Union regarding prudential supervision and the second and third stages of EMU;

7.Considers that only a gradual approach based on the progressive and best possible harmonization of the rules on prudential supervision can pave the way for an effective and consistent monitoring system;

8.Considers that during the second stage of EMU this gradual approach should lead to a further approximation of the rules on supervision between the Member States, arrangements for monitoring and implementation remaining the responsibility of the Member States;

9.Expresses its confidence in the cooperation between national central banks which is to be undertaken within the European Monetary Institute to make a comparative study of the methods and resources employed for the supervision of financial institutions, and that this will enable it to provide the European Parliament, the Council and the Commission with the recommendations it deems necessary;

10.Considers that it is at the moment premature to make assumptions about the institutional form which the organization of prudential supervision at Community level might take during the third stage of EMU;

11.Believes nevertheless that, even though there will have to be substantial harmonization of rules on supervision during the third stage of EMU and these rules need to be strict, responsibility for monitoring and implementing them can remain with the Member States; only after a fairly lengthy period of adjustment would it perhaps be possible and appropriate to confer responsibility for monitoring and implementation on a European body (the European Central Bank or some other);

12.Calls for a study to prepare if necessary a Commission proposal pursuant to Article 105(6) EC for specific prudential tasks to be transferred to the ECB;

13.Calls for an urgent study on the effects of the proliferation of financial derivates on monetary stability and on how to cope with it;

14.Wishes the President of the European Monetary Institute, when he appears before its specialized committee, to report regularly on his thinking and the progress made by the EMI on this subject;

15.Instructs its President to forward this resolution to the Commission, Council and the European Monetary Institute.