The European Parliament has voted in favor of European- wide minimum standards in the financial sector until the end of the year. MEP Kurt Joachim Lauk of Germany, spokesman for the EPP-ED-Group on the issue, said, “This report comes at the right time and is very concrete, because it covers all relevant financial market actors and instruments. It is therefore a good basis for a future EU financial market regulation.” By contrast, the original aim of PSE rapporteur Poul Nyrup Rasmussen of Denmark to limit the report only on hedge funds and private equity was successfully changed, leading Lauk to say that “Ideological demands reflecting only the European Socialists views are not included in the report anymore.”
Lauk said the Socialist rapporteur took over almost all basic principles for a future financial market regulation from the EPPED- Group: “The ongoing crisis of the banking sector shows that we cannot longer rely on US-standards, particularly since the American control systems partly failed substantially.” As a consequence, the European Union must create its own protection and control mechanisms including the necessary risk evaluation, risk-based capital requirements, more transparency of financial instruments and an appropriate participation of responsible managers not only in profits, but also in losses.
Moreover, Lauk suggested to hold rating agencies liable for their evaluations, following the example of auditors which already exists. Furthermore it should be considered if derivatives must be traded obligatorily at the stock exchange, with a possible exception for interest rate swaps.