As the European Union continues to reel in a locked-in recession and founders while trying to find a coordinated response, a report has recommended it should improve its ability to jointly supervise the bloc’s financial sector by creating three new supranational and independent authorities.Named after its chief author Jacques de Larosiere, a former head of the International Monetary Fund (IMF) and of the French central bank, the report lays the basis for discussions to be held by the EU’s 27 member states, under the guidance of the European Commission. “The report confirms my firm belief that a European system of financial supervision is indispensable,” said Commission President Jose Manuel Barroso. ”We must avoid every-man-for-himself solutions,” he said.

While falling short of seeking the creation of what de Larosiere called an “unrealistic” single pan-European watchdog, the report’s recommendations, if accepted, would significantly strengthen cooperation on financial matters between member states. The three European authorities proposed would replace existing, but weak, European committees tasked with supervising the bloc’s banking, insurance and financial sectors. While existing national supervisors would continue to carry out domestic day-to-day supervision, “colleges of supervisors would be set up for all major cross-border institutions,” the report stated. The move is designed to avoid a repeat of the confusion seen over who should deal with Fortis - a troubled bank whose main operations are spread across Belgium, the Netherlands and Luxembourg.