European Central Bank and European Commission hold joint conference to strengthen the foundations of integrated and stable financial markets

The European Commission is hosting today in Brussels the second of a series of annual conferences, jointly organised with the European Central Bank (ECB). This conference features a number of top-level financial market participants, regulators, academics and political leaders who will discuss the future of European financial markets in the wake of the establishment of the new supervisory architecture in Europe.

The morning panel brought together Commissioners Olli Rehn and Michel Barnier; Vitor Constâncio, Vice-President of the ECB; Sharon Bowles MEP and Chair of the Economic and Monetary Affairs Committee of the European Parliament; Andrea Enria, Chairperson of the European Banking Authority and Mario Draghi, Chairman of the Financial Stability Board and Governor of the Bank of Italy; and focused on the future of the new supervisory framework for financial markets in the EU.

Commissioners Rehn and Barnier stressed that Europe has taken decisive and comprehensive action to defend financial stability and will continue to do so, as financial supervision and regulation lagged behind the high level of integration in EU financial markets reached before the crisis: "A strong and independent new supervisory architecture will establish the European perspective, across individual financial institutions and across national borders. It provides the necessary means to effectively address the ever closer link between micro- and macro-prudential issues in an integrated financial market. ".

Vice-President Constâncio emphasized that " the establishment of the European Systemic Risk Board and the European Supervisory Authorities in the EU is an important milestone that should provide the appropriate incentives to avoid excessive risk taking and contribute to creating a level playing field, benefiting the financial integration within the monetary union. An important complementary element of the new supervisory framework will be the establishment of an EU framework for crisis management".

In the morning session, the ECB and the Commission presented their reports on stability and integration for 2010.

The analysis of developments in the financial markets during 2010 reveals an improved resilience of the financial sector and increased market stability, although the necessary process of restructuring in the banking sector is still ongoing. It was also highlighted that financial integration is likely to deepen further at a more sustainable pace when financial stability is restored.

In the afternoon session, José Viñals, Director for Monetary and Capital Markets at the IMF will deliver a presentation on macro-prudential policy. This intervention will be followed by a panel discussion on the future of financial markets in Europe.