European Committee of Wise Men Publishes Interim Report, November 2000

Washington, DC, November 16, 2000 - The Committee of Wise Men on the Regulation of Securities Markets recently published an interim report reviewing the European Union's (EU) current regulatory conditions and proposing methods to enhance a single financial services market in the EU. The Institute submitted comments to the Committee of Wise Men during the comment period on a number of issues relating to an integrated European securities market. The Committee of Wise Men plans to publish its final report in mid-February 2001 in advance of the Stockholm European Council meeting in March 2001.

The Committee's interim report describes the benefits of European financial integration, the trends in the European financial markets, and the shortcomings of the current European regulatory framework. The Committee stated that the current regulatory system is too slow and rigid, contains too much ambiguity resulting in inconsistent implementation, and relies overly on European legislation to provide detailed rules. With respect to European regulation, the Committee suggests that one possible solution would be to introduce a four-level approach to regulation, which involves:

enacting an EU securities legislation that provides a framework of broad principles on various issues;
creating an EU Securities Committee that would be responsible for the implementation of the broader EU legislation;
having member states responsible for implementing the community law in the context of enhanced and strengthened cooperation among the regulators; and
strengthening enforcement of community rules through more vigorous action by the Commission and enhanced cooperation between the member states and their regulators.