BRUSSELS (MNI) – Policymakers shouldn’t lose the momentum they’ve
gained in implementing reforms and new financial standards, European
Central Bank Governing Council Member Guy Quaden said on Tuesday.

Europe’s plans include new financial supervisors, which were
finalised earlier this month, and the implementation of new capital
requirements outlined in the Basel III deal.

“We should not let this momentum slip away,” Quaden told delegates
at the Eurofi conference in Brussels, adding that there should be as
much emphasis on the “entrance” of the new measures as on the exit
strategies from the crisis.

He said the Basel deal, which requires banks to hold more capital
was “very important.”

“Many in the banking industry complained and argued” that the
reforms would have a negative impact on growth, he said. But the length
of the transition period built in means that the economic costs of
imposing the new standards “should be very small” in comparison to the
long term gains, he argued.

Quaden said effective regulation requires close multinational
coordination and a “holistically coordinated approach.”

“I strongly support the recent decision to set up a European
Systemic Risk Board,” he said, adding that Europe’s new regulation plans
should bring “more consistency” to the 27-state bloc’s approach to
regulation.

Earlier, at the same conference, Belgian Finance Minister Didier
Reynders outlined his country’s plans during its Presidency of the
European Union, which lasts until the end of this year.

Reynders said the Belgian Presidency would focus on financial
market reforms, budget consolidation and structural reforms.

He welcomed the deal that was reached on financial supervision, but
outlined ways in which the bloc could go further, including giving one
of the new supervisors, the European Securities and Markets Agency, or
ESMA, the power to impose fines on credit ratings agencies.

European Commission President Jose Manuel Barroso told the same
conference that the Commission “is not interested in bashing
the banks and the financial industry.”

The EU’s executive arm is more interested in “implementing balanced
solutions,” he said. “We want to see strong financial markets.”

Barroso reiterated the Commission’s plans to deliver proposals on
all areas of financial reform by spring next year.

But he said appropriate phasing in of the reforms was needed to
avoid inhibiting the economic recovery.

“There is no time to lose in getting Europe back on the path of
growth and jobs,” the Commission president said.

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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