Enhanced regulation of financial markets moves closer

IT was full steam ahead in Berlin yesterday with plans for the EU to regulate every aspect of the financial markets despite another day of nosediving figures for the euro and stocks.

German Chancellor Angela Merkel told an international conference on market regulation she intends to pursue her drive to tighten control of the markets through the G20.

Internal Market Commissioner Michel Barnier promised to present all the proposals necessary to meet their G20 commitments by next spring at the latest so they can be implemented by the end of 2012.

However, he added the ambitious agenda must be co-ordinated globally and needed political commitment from all EU leaders to act together. Following his visit last week to the US, he said his US counterparts agree the G20 agenda is the common roadmap.

All aspects from markets and derivatives to banking, insurance to credit rating agencies and corporate governance will all be subject to either new legislation or revision of the existing rules, Mr Barnier promised.

But the main challenge will be to keep up the political momentum, he said.

And the financial industry must play its part by sharing its technical knowledge and committing to change, he added.

These sentiments were echoed by Ms Merkel, who was a little less aggressive than when she told her parliament earlier this week that the future of the euro was at stake from destructive markets.

But she said governments must take control as citizens were now asking what powers do the politicians still have. The G20 agreed every aspect must be regulated.

“That’s what we promised the people. Now 18 months later people are asking what has happened. At some point we must deliver,” she said.

Ms Merkel called on Canada and South Korea to take action also ahead of the G20 summit in Toronto in mid-June.

Her government’s much criticised decision to ban naked short-selling on euro government bonds and 10 German financial institutions was to show they were prepared to act and not just talk, she said.

Her finance minister Wolfgang Schaeuble will present nine key proposals in Brussels today.