'EU financial stability is top priority after Brexit'
Published 19/07/2016 | 07:25
Maintaining the European Union's financial stability is the top priority following Britain's vote last month to leave the bloc, the European Commission's new financial regulatory chief said on Monday.
"Following the UK's decision to leave the EU, ensuring financial stability is our first priority," Valdis Dombrovkis said in a speech in which he laid out his priorities for dealing with the uncertainty stemming from the June 23 referendum and for overseeing banks and institutions in the EU.
Dombrovkis also discussed strengthening ties with the United States, noting that he was visiting the US capital on his first day in his new role.
"What my approach will be: Above all, continuity," he said.
Dombrovkis said he will continue the work of his predecessor, Jonathan Hill, on capital markets and reviewing regulations enacted after the 2007-2009 financial crisis.
He said he had met with his US counterparts, and they were establishing a forum to meet frequently and discuss regulatory cooperation. Through the forum, he will meet with the US Treasury secretary every year.
"This relationship can be driven further in both directions," he said. "We need to talk to each other more often, to clarify the scope of future rules and to ensure we understand impact of regulation on ground."
The major purpose of the forum is to identify potential problems at the early stage of the regulatory process, Dombrovkis said.
Dombrovkis also listed some of the European Commission's upcoming moves, including releasing a proposal for resolution of failing banks later this year and finalising the steps for implementing the Basel III banking rules.
He added that "in time" the EU will implement requirements for how much capital and long-term debt banks must have on hand so they can resolve a failure without government assistance, known as "Total Loss Absorbing Capacity."
He said he will also talk to members of the European Parliament about advancing a long-stalled proposal on bank structural reform.
The US-EU financial forum was generally greeted with optimism on both sides of the Atlantic.
The Association for Financial Markets in Europe said it has the potential to build upon current transatlantic cooperation, and that "more needs to be done to enhance international coordination and facilitate cross-border investment."
Meanwhile, the American Insurance Association said the forum "recognizes the need for discussions about the potential economic impacts of proposed rules."