Jean Claude Juncker plans to be hands on with financial institutions
The commission president announced today he wants to control clearing houses located outside the European Union, as he plans to take over internal Capital Markets.
For two years Mr Juncker has been plotting his Capital Markets Union which would give him the power to control central banks and the free market within the 27 member state bloc.
Now he wants to expand this to control the world’s financial institutions and demand access to their private investors’ information.
In this context, it should also ensure effective supervisory arrangements for clearing houses located outside the EU
Mr Juncker, 63, approved the announcement this morning and is now planning ahead for another announcement next month.
According to a report in City Am yesterday, the European Commission is said to prefer the idea that “where necessary, direct supervision at EU level and or location requirements” is introduced for all banks working in the European Union, including British and US domiciled institutions.
How Mr Juncker plans to get thousands of financial institutions from around the world to comply with his demands is however questioned.
Mr Juncker here with Alexis Tsipras is partial to power grabbing
The issue of Brexit has also prompted the commission to look again at how derivatives are cleared, a process carried out by a third party to ensure a trade is completed.
It said it intends to present further legislative proposals before the summer to address “important and emerging” challenges in derivatives clearing.
The announcement added: “In this context, it should also ensure effective supervisory arrangements for clearing houses located outside the EU that clear substantial volumes of derivatives denominated in EU currencies and play a key systemic role for EU financial markets.”
The Mayor of London could barely contain his amusement when he met Juncker
Last week, Mr Juncker said the European Union was to publish proposals to implement “limitations” on central banks across the remaining 27 states as they continue their power grab.
Now after more details crept into the public domain, Mr Juncker appears to be planning to not only intervene in all European passported Clearing Houses but in banks worldwide.
The London Stock Exchange (LSE), which operates worldwide, is warning that the impact could lead to an “off-shore euro swap liquidity pool” while at the same time helping to dry up the internal swaps market, which will in turn make it smaller.
The LSE, which dramatically put the brakes on its merger with Germany’s Deutsche Börse Group amid an anti-trust probe in February, has slammed the proposals.
He greets David McAllister former Prime Minister of the German state of Saxony
It says: “The net effect would be the creation of an international offshore euro swaps liquidity pool for non-EU entities, and a parallel less liquid, smaller onshore euro swap market which would damage only European issuers, savers, investors, pension funds and intermediaries”.
London-based MEP Syed Kamall said: “The question of future oversight from the EU will be a matter for the Brexit negotiations, but politicians should listen to the businesses that actually do the trading and ask where they want to be.”
Last week French and German banks spoke out to prevent the power grabs by Brussels over fears their policies will effectively stifle growth, lead to jobs cuts and ultimately kill profits.
The financiers say they will not be allowed to be competitive internationally after the bloc announced it is to make sweeping alterations to capital markets.
Frederic Oudea, chair of the European Banking Federation and chief executive of SocGen, said: “We cannot ignore the growing fragmentation of the international regulatory landscape in light of recent political changes notably in the US.
“The perspective of the Brexit adds… to that trend.
“This topic is particularly important at a time where we need to think strategically about the direction we want to take for capital market activities in Europe in light of Brexit consequences.
“The Economic Affairs Committee has oversight of financial rule-making in the European Parliament, which has joint say with member states on approving the EU’s laws.”
Andreas Treichl, chief executive of Austria’s Erste Group, said he was spending most of his time with politicians and 10 regulators, rather than with customers.
He said: “Please reflect on what you have done.
“It’s very, very difficult for us to be helpful to create prosperity, and part of the reason is ourselves, and part of the reason is you, the politicians, and part of the reason is the regulators.
“Who do you think will finance start-ups? The capital market is not there, the private investors are not there, and banks increasingly face difficulties in doing it.”
Meanwhile Karl-Peter Schackmann-Fallis German Savings Banks Association board member said banks need “a regulatory pause”.