The European Commission has published a summary of responses to its consultation on shadow banking (basically credit intermediation by non-banks - largely securitisation). The Commission concludes that:
"The analysis of comments received suggests that there is support for regulatory measures in the EU subject to key principles, i.e. they have to improve financial stability, they are proportionate, they reduce regulatory arbitrage, they reflect the global characteristics of shadow banking, they improve transparency and they facilitate long-term growth."The point about regulatory arbitrage is key. Not only should differences between member state frameworks be eliminated, but the regulated sphere of activity also needs to take account of activities and developing financial services that are not regulated.
While it's encouraging to see the EC finally working out how to close the stable door, albeit long after the occupant decamped, it's disappointing that the review did not look at peer-to-peer lending, a horizontal form of credit intermediation that avoids the need for securitisation altogether.
But I would say that, wouldn't I?