Even if we thought it should legislate in this area – which we do not – the way this is happening is not good news.The EU, we are told, is moving into top gear on financial regulation reform "as part of global efforts to apply lessons from the credit crunch and make markets safer for investors." However, it seems, this complex process has turned into a "race" dictated by the timetable for the Euro-elections.
In order to get the first stages of the legislation through before the parliament breaks to go electioneering, the EU commission wants to rush its proposals through, to avoid hang-ups later.
The timetable is also heavily influenced by the prospect of a new commission taking over – with a considerable hiatus as new members are vetted and approved by the EU parliament, putting new legislation "on hold" from June until near the end of the year.
On the agenda are, amongst other things, reforms to the bank capital rules, in an attempt to undo some of the damage done by the Basel Committee on Banking Supervision guidelines. But, considering the labyrinthine complexity of these rules, and the fact that the Basel Committee took fourteen years to get them wrong, the thought that the EU is rushing ahead with modifications is not a happy prospect.
Certainly, no thought is being given to any wide-ranging examination of the regulatory structures which have done so much damage. This is more of the same, only done at great speed, which can only bode no good.
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