1. EU Reaction to the Financial Market Turmoil

2. Context of task force Institutional issues which have hampered adequate functioning of European supervision Make recommendations to policy makers with a group reflecting a diversity of interests

3. Problems with Lamfalussy Level 3 purely advisory Are asked to do more without resources and powers Continuing problem with exchange of information No framework for delegation of supervision

4. October Ecofin Council common principles for cross-border financial crisis management  Ministers state that they will “carefully cooperate” in the case of a cross-border crisis and react “based on common terminology and on a common analytical framework” a roadmap to practically enhance supervisory cooperation  Member states are ‘encouraged’ to sign ‘voluntary cooperation arrangements’ as soon as possible  Commission to clarify the scope of the EU’s deposit guarantee directive

5. T Padoa-Schioppa letter Need for formal agency role for Level 3 Committees  Take binding decisions  Set standards Need for a single rulebook Integrated supervision of European-wide banks Need for wise-men’s comittee

6. December Ecofin Council role of the regulatory and supervisory Committees  Commission asked to consider various options to strengthen the Level 3 Committees “without unbalancing the current institutional structure”, and  Level 3 Committees were requested to strengthen the national application of their guidelines “without changing their legally non- binding nature”  Committees to analyse the options of “voluntary delegation of supervisory competences”  Committees were requested to appky qualified majority voting where necessary financial support under the EU budget for the Level 3 Committee

7. G-4 Summit London (Jan 30) EU: common ‘things’ but no framework (see October Ecofin) regular reporting from the Level 3 Comm strengthen and clarify the IMF's responsibility to oversee macro financial stability

8. Broader issues What is transparency? Lack of European-wide oversight, many spokes, no hub Accountability and independence of supervisors National mandate of supervisors, differences in powers Harmonisation of objectives of supervision