The S&Ds voted today in favour of a report defending that the EU should remain in charge of its own banking and financial regulation in the Single Market, and the application thereof, when doing business with third countries. Moreover, the report calls on the European Commission to render equivalence systems more robust, stable and transparent.
‘Equivalence’ refers to a process whereby the European Commission, on a unilateral basis, assesses and determines whether the regulatory, supervisory and enforcement regime of a third country is equivalent to the corresponding EU framework. When equivalent, authorities in the EU can rely on third country entities’ compliance with the third country framework. ‘Equivalence’ is one of the examples of the post-crisis solution aimed to guarantee stability, restore market confidence and facilitate cross-border provision of financial services.
S&D negotiator for the financial services regulation, Jonás Fernández Alvarez MEP, added:
“The report voted today is an important step ahead towards ensuring the stability of the Single Market. It reiterates that the EU should remain in charge of its own rules and safeguard its powers when it comes to ‘equivalence’. This is essential for guaranteeing financial stability, high levels of consumer and investor protection and the transparency of the decision-making.
“It is important that financial entities of third countries that provide financial services in the European market have in place financial regulation and supervision as stringent as in the European countries, that can, thus, be deemed as ‘equivalent’ to those of the EU. In view of Brexit, the rules need to become more transparent.”
S&D Group spokesperson on economic and monetary affairs, Pervenche Berès MEP, said:
“Today’s vote reminds us of the financial crisis of 2008 and its repercussions for the European citizens and the EU banking and financial system. Ten years on from the financial crisis, we must ensure that we avoid the trap of complacency. To this end, robust, stable and transparent regulation of financial services is key. With Brexit on the horizon, the EU must guarantee that there will be no lowering of standards in the Single Market and no loopholes allowing tax evasion, tax fraud, tax avoidance or money laundering.
“For us Socialists and Democrats, it is paramount that there will be no race to the bottom in financial supervision to attract investors.”