As a senior member of both the European Parliament’s ECON committee and the Delegation for Relations with the United States, I take a very close interest in the issue of convergence of regulation between the EU and US, particularly in the area of financial services.

My office has conducted an audit of the differences that have emerged in 12 critical areas, details available here: http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-83ABC83D-68279FF2/bst_engl/xcms_bst_dms_32455_32456_2.pdf

Going forward, I am committed to trying to achieve greater transtlantic convergence, which will result in improved oversight of providers of financial services, less opportunity for regulatory arbitrage, and ultimately reduced costs for consumers as barriers to competition are reduced.

Yesterday in Strasbourg MEPs voted in favour of my report on the creation of a new European authority for overseeing the activities of cross-border insurers and occupational pensions providers by a massive margin: 597 in favour, with only 29 against (photo, right: press conference following the vote).

I have previously posted on the purpose and activities of the new body, known as EIOPA, so I won’t go into that here. But I would note that such is the need for this new body that even arch-eurosceptic, and #1 Tory South East MEP, Daniel Hannan (he of the NHS is a ’60 year mistake’ fame), voted in favour.

Still, you can always rely on UKIP to do the worst for the UK’s interests. To form, they all voted against. Indeed, William Legge, 10th Earl of Lord Dartmouth, and a UKIP MEP, took the time to object to the creation of the new authority, prior to the vote yesterday. You can see his point of order, and my response here – http://www.youtube.com/watch?v=Xk2HBjg5Qtw (Thanks Lord Dartmouth for posting this, and to all of your supporters for the erudite comments underneath).

To see the full hour long discussion prior to the vote click here – http://news.bbc.co.uk/democracylive/hi/europe/newsid_9017000/9017067.stm

Last week the European Parliament reached agreement with national governments and the European Commission on the creation of a new European supervisory architecture for financial services.

I was one of the five MEPs on the Parliament’s negotating team (see photo, right, of trialogue negotiations), my chief responsibility being for the creation of the new European Insurance and Occupational Pensions Authority. It was a hard slog. In the end we had around 25 trialogues, which is the technical term for the negotiations. I believe that must be quite near a record!

The reason why the negotiations were so ardeous was that the legislation is so important and far-reaching. The purpose is to prevent another breakdown of communications between national supervisory authorities, as occurred between the UK, Iceland and the Netherlands over Icesave, or between the Belgian and Dutch authorities over Fortis.

I won’t go into all the details on the powers of the new authorities here,  interested readers can find out more at – http://www.europarl.europa.eu/news/expert/infopress_page/042-80951-245-09-36-907-20100902IPR80950-02-09-2010-2010-false/default_en.htm

Suffice to say that all parties came out of the negotiations fairly happy with the outcome. The powers of the new supervisory authorities are concorrent with the roles bestowed upon them. National governments retain ultimate responsibility, as should be the case given that they are the ones responsible to tax-payers for bail-outs. However, the new bodies have enough teeth to help overcome some of the problems witnessed during the last crisis. I am very pleased with the result.

On Wednesday 10th February I presented my draft report on the creation of a new European supervisory authority for the insurance and occupational pensions industries.

My report was presented alongside similar reports to create authorities for the banking and securities and markets sectors, produced by rapporteurs from the European People’s Party and the Greens. In parallel the rapporteur from the European liberal group presented her draft report on the creation of a European Systemic Risk Board to monitor the potential for macro-economic risks in the European economy.

The four new bodies that will be created will be essential to help monitor the development of potential risks in the European financial system, and take action to prevent them from becoming full-blown crises. In the event that a crisis occurs, the new authorities – it is hoped – will allow for better communication and coordination of responses between national authorities.

While there was some divergence in the exact role and powers to be granted to the new authorities between the rapporteurs, the overall direction of what we want to see achieved is the same: a consolidated approach to the supervision of systemically important financial institutions within the European Union, and the adoption of a single rulebook for financial institutions in all EU Member States. This will allow for greater integration of financial services in the EU, and a more coherent regulatory approach.

Our draft reports will now be considered by other MEPs in the ECON Committee, who will be able to table their own amendments. We hope to have the reports agreed with the rest of Parliament and the Council of Ministers over the summer, so that the new authorities can be up and running by the start of 2011.