BRUSSELS (MNI) – Financial market participants need to be regulated
so that they look more at fundamentals over the longer term rather than
only seeking short-term gain, European Commission President Jose Manuel
Barroso said on Wednesday.
Speaking after the Commission announced plans to supervise credit
ratings agencies EU-wide, Barroso said the EU’s executive arm wants to
have all the new financial regulatory bodies in place by 2011.
“We also need measures to regulate the behaviour of actors in the
financial markets,” Barroso said. “We have seen both in 2008 and in
recent weeks a tendency of not looking enough at the fundamentals, of
not looking enough at the long term, of following the trend in the hope
of making some short term gain. This needs to change,” he added.
Barroso said the Commission would make a proposal on the
derivatives market before the end of the summer. The Commission is also
working on a new set of regulations for credit rating agencies, he said.
“There is an emerging view in Europe and internationally that the
deficiency in the current rating process has not yet been sufficiently
addressed,” Barroso said. “The lack of competition is of particular
concern.”
Barroso said the EU would take its proposals to the G20 meeting in
Toronto, where a tax on banks and other financial institutions will also
be discussed.
“I am personally in favour of a financial transaction tax or a
profit tax,” Barroso said. “And, like the International Monetary Fund, I
think these can be complementary tools to resolution funds.”
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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