7th Annual European Financial Services Conference: extracts from the speech by Charlie McCreevy
Type: Speech - summary
End production: 27/01/2009 First transmission: 27/01/2009
As the European Commission adopted on 26 January 2009 a set of decisions to strengthen the supervisory framework for EU financial markets, Charlie McCreevy, Member of the EC in charge of Internal Market and Services, gave a keynote address at the 7th annual European Financial Services Conference on 27 January 2009 in Brussels. The conference gathered financial experts and decision-makers to discuss and debate the crisis and consequences affecting European and global financial markets.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior view of ING headquarters in Brussels
||General views of the conference (2 shots)
||Soundbite by Charlie McCreevy, Member of the EC in charge of Internal Market and Services, (in ENGLISH) saying that the scale of irresponsible origination and underwriting, lack of due diligence, toxic securitization, and reckless credit ratings was far greater in the United States than anywhere else in the world; there is no doubt but that it was primarily this that triggered the global crisis on the scale that we are now seeing; that said, European banks bought into these toxic securities and in Europe there is now a broad consensus that our supervisory systems are not and have not been up to the mark or fit for purpose, not fit for purpose at an EU institutional level, not fit for purpose at a Member State level.
||Soundbite by Charlie McCreevy (in ENGLISH) saying that it must now be clear to everyone that there is a growing gap between the EU supervisory structure, which is primarily organised on a national basis, and market developments, where integration and internationalisation lead to complex interdependencies and growing spill-over effects; the crisis has brought into sharp relief the weaknesses of the present arrangements, in particular, significant coordination problems and conflicts of interest between Member States.
||Cutaways (2 shots)
||Soundbite by Charlie McCreevy (in ENGLISH) saying that the crisis has required substantial state intervention in financial institutions in many Member States, and in this regard no one could argue that the Commission was anything other than vigorous and efficient in applying EU law, notably on competition and state aids, but doing so in a way that was flexible and rapid - which was essential to maintain confidence in the banking system and prevent the crystallization of systemic risks.
||Soundbite by Charlie McCreevy (in ENGLISH) saying that it is, of course, the case that diversification among less than perfectly correlated assets should reduce the overall risk of a portfolio below the risk of the sum of its parts; but as is now clear for all to see that theory is only of relevance to individual portfolio positions; extrapolating the benefits of diversification to highly integrated global capital markets and then embedding the supposed benefits in prudential regulation is a composition based on a fallacy.
||Cutaways (2 shots)