Principles and practices of EU external representation - TMC Asser ...

CLEER WORKING PAPERS 2012/5
Wouters, Van Kerckhoven and Odermatt
European Systemic Risk Board
The European Systemic Risk Board (ESRB) was established 91 in 2010 to help
mitigate systemic risks to financial stability by providing macro-prudential regulation
and supervision at the EU level. The ESRB was a recommendation of
the de Larosière Report which stated that the EU ‘must work with [its] partners
to converge towards high global standards, through the IMF, FSF, the Basel
committee and G20 processes. ’92 One of the goals of the ESRB, as outlined in
its preamble, is to contribute ‘towards implementing the recommendations of
the IMF, the FSB and the Bank for International Settlements (BIS) to the G-20.’ 93
The ESRB is to cooperate with the IMF and FSB, which are also tasked with
mitigating systemic risks.
OTC and commodity derivatives markets
The G20 Cannes Final Declaration stated that ‘Reforming the over the counter
derivatives markets is crucial to build a more resilient financial system. All
standardized over-the-counter derivatives contracts should be traded on exchanges
or electronic trading platforms, where appropriate, and centrally
cleared, by the end of 2012.’ 94 The topic of OTC derivatives has been a central
concern of the G20 since 2008, especially since the lack of regulation in this
field is seen as one of the key problems that caused the financial crisis. 95 The
need for greater transparency and standardization in OTC derivatives was also
a key recommendation of the de Larosière Report. 96
On 15 September 2010, two years after the collapse of Lehman Brothers,
the European Commission proposed a regulation on OTC derivatives, 97 which
it said is ‘fully in line with the EU’s G20 commitments’ 98 and has been inspired
by the G20 leader’s commitment to ‘improve transparency and regulatory oversight
of over-the-counter derivatives in an internationally consistent and nondiscriminatory
way.’ 99 Furthermore the Commission added:
91 Regulation 1092/2010/EU of the European Parliament and of the Council of 24/11/2010 on
European Union macro-prudential oversight of the financial system and establishing a European
Systemic Risk Board [2010] OJ L331/1.
92 Report of The High-Level Group of Financial Supervision in the EU Chaired by Jacques de
Larosière, Brussels, 25 February 2009, at 3.
93 Regulation 1092/2010/EU of the European Parliament and of the Council of 24/11/2010 on
European Union macro-prudential oversight of the financial system and establishing a European
Systemic Risk Board [2010] OJ L331/1, Preamble, Recital 8.
94 G20 Leaders supra note 76.
95 G.F. Peery, The Post-Reform Guide to Derivatives and Futures, (Wiley Finance 2012) at
18; J.E Stiglitz, Freefall: America, Free Markets and the Sinking of the World Economy, (Norton
W.W, 2010).
96 Report of The High-Level Group of Financial Supervision in the EU Chaired by Jacques de
Larosière, Brussels, 25 February 2009, Recommendation 8.
97 European Commission, Proposal for a Regulation of the European Parliament and of the
Council on OTC derivatives, central counterparties and trade repositories (2010).
98 European Commission, Making derivatives markets in Europe safer and more transparent,
Brussels, 15 September 2010. Press Release.
99 European Commission supra note 97 Explanatory Memorandum, p. 2.
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