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Financial Market Stability in the European Union: Enhancing Regulation and Supervision

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  • Jeremy Lawson
  • Sebastian Barnes
  • Marte Sollie

Abstract

Financial innovation and integration have spurred financial development and enhanced consumer choice. Financial integration has also been associated with the emergence of large, complex, cross-border financial institutions (LCFIs). This has changed risk profiles and made cross-border contagion more likely. An important challenge for the EU is to manage systemic risks and cross-border contagion to ensure financial stability in an integrated financial market. The financial market turmoil has also highlighted some gaps in the regulatory and supervisory framework. Although the European authorities should be commended for the progress they have made in updating and improving frameworks and responding to the financial turmoil, more can be done. In particular, further steps are needed to remove the mismatch between integrating European financial markets on the one hand, and largely national supervision on the other. Attention should also be given to the question of which measures are adequate to dampen the procyclicality of the financial system. New regulations should not impose unnecessary costs on consumers, businesses and financial institutions, nor create obstacles to further market integration. Stabilité des marchés de capitaux dans l'Union européenne : Améliorer la réglementation et le contrôle L’innovation et l’intégration financières ont favorisé le développement de la sphère financière et élargi les choix offerts aux consommateurs. L’intégration financière a aussi été de pair avec la formation de grandes institutions financières transnationales (GIFT) complexes. Ce phénomène a modifié les profils de risque et accru les risques de contagion transnationale. Pour l’UE, l’un des grands problèmes consiste à maîtriser le risque systémique et la contagion transnationale afin d’assurer la stabilité financière sur un marché des capitaux intégré. La tourmente financière a aussi mis en relief un certain nombre de failles du dispositif de réglementation et de contrôle. Bien que les autorités européennes méritent d’être félicitées pour leurs progrès dans le sens de la modernisation et de l’amélioration de leurs dispositifs et pour leur réaction à la tourmente financière, on peut faire davantage. En particulier, de nouvelles mesures sont nécessaires afin de remédier au décalage entre l’intégration des marchés européens de capitaux d’une part et des régimes de contrôle à caractère largement national de l’autre. Il convient en outre de se demander quelles mesures faut-il mettre en oeuvre pour atténuer le penchant procyclique du système financier. Les nouveaux règlements ne doivent pas faire peser des coûts inutiles sur les consommateurs, les entreprises et les institutions financières, ni entraver la poursuite de l’intégration des marchés.

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File URL: http://dx.doi.org/10.1787/226578225340
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 670.

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Date of creation: 20 Feb 2009
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Handle: RePEc:oec:ecoaaa:670-en

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Keywords: financial supervision; European Union; financial regulation; financial crisis; crise financière; réglementation financière; Union européenne; surveillance prudentielle;

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