de Larosière Report

Key points:

The EESC generally endorses the Group's 31 recommendations but would like to widen the focus of the analysis and make a number of comments and additions. The EESC believes that one explanation of the crisis is that there has been a shift in income distribution away from labour income to capital income. The EESC thinks that higher capital requirements and greater transparency for off-balance sheet operations are absolutely essential. It believes that stricter rules are required for " Off-balance sheet items" and "Special purpose vehicles ".

The EESC believes that making the riskiness of bank assets more transparent ought to be one of the main demands in the follow-up to the report. Banks and financial institutions should always retain a part of the underlying risk on their books when risky assets are sold on. The "parallel banking system" should also be brought within the ambit of regulation. The role of auditors and accounting methods should be included in the revision of Basel II. Bonus schemes should be set in a multi-year framework and reflect actual performance rather than just being guaranteed in advance. The EESC supports the idea of a tax on financial transactions, the proceeds from which could be allocated to development aid.

The EESC believes that colleges made up of supervisors from the relevant national supervisory authorities could be difficult to manage unless accompanied by the necessary harmonisation. The boards of the proposed three new authorities should not be composed of only bankers. Trade union organisations, consumers of bank services as well as the EESC, as the representative of civil society, should also be given places on the boards.

The Financial Stability Forum set up in 1999 to promote global financial stability was recently transformed into the Financial Stability Board. The EESC hopes that this body will become more transparent and be endowed with adequate resources, knowledge and the power to act. The EESC welcomes the fact that the IMF will be given more resources to help countries facing acute problems but would criticise the demands laid down by the IMF, which bring into question important aspects of the European social model. It is all the more reason why it is essential for the EU to speak with a single voice within the IMF.