The Economic and Monetary Affairs (ECON) exchange views with Michel BARNIER, European Commissioner for the Internal Market, on the economic governance and stability framework of the Union, in the European Parliament in Brussels.

Brussels

exchange of views

statement

BARNIER, Michel (FR)

economic governance (T)

Economic governance and stability framework of the Union: extract from the statement by Michel BARNIER, European Commissioner for the Internal Market

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, The derivatives are tremendously important to the economy in terms of volume of transactions it's grown considerably over the last 15 years and account now for over 600.000 billon dollars.The situation is very far from satisfactory because 80 % of that trade today is over the counter trading without any reporting or adequate inspection

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, So we have to have transparency everywhere on derivativess cause we want to make sure that they are traceable , we want to do that by reaching the most far reaching standard position. Thanks to this Parliament and his rapporteurSven Giegold ESMA will be allowed to prohibit them if they are dangerous derivatives.

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, Secondly all transactions in the future will be recorded in dedicated logs these would be sort of "black boxes" .

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, We will encourage abd spread compensation which is another way of reinforcing transparency and indeed making sure that these transactions are more secure... we will do,that by adjusting the requirement of equity and they will be encourage to do so by reducing the capitalisation requirement.

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, So we will taken into account these specific problems of businesses many of which when they export have recource to derivatives to hedge their excange risks, so in those cases we think that if theu don't use these derivatives to speculate bu to hedge to protect their own activity and the jobs that dpend on them here in Europe.

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, The sale of securities or financial assets with the aim of buying them back and somtimes not knowing when you sell them where you will be able to cover thoses costs benn around for a long time. Without being ideological about it we are of the opinion that short selling specially on debt markets may have certain advantages for facilitating liquidities ; so we are not going to tackle this issue in a doctrinary fashion so we are tackling it with the aim of forcing people to be transparent and responsible.

SOUNDBITE (French), Michel BARNIER, European Commissioner for the Internal Market, So we will considerably strengthen the laws governing bear selling so that if someone is short selling he has the securityhe needs to complete the transaction by taking out a loan or an equivalent method. If that precaution is not taken market operators is not able of supplying the securities within three days on the fourth day he will have to settle by cash.