June 19 European Union leaders will on Friday back a reform of financial supervision involving the creation during 2010 of pan-European standard-setting and risk-monitoring bodies, according to a final summit draft.
Here are some of the details of the draft conclusions, which could be amended before the summit ends. The leaders agreed:
* The financial crisis has "clearly demonstrated the need to improve the regulation and supervision of financial institutions, both in Europe and globally".
* Further progress must be made in the regulation of financial markets, notably on the regulation of alternative investment funds, the role and responsibilities of depositaries and on transparency and stability of derivatives markets.
* Member states should take action rapidly on executives' pay and on remunerations in the financial sector.
* A European Systemic Risk Board should be created to monitor and assess potential threats to financial stability and, where necessary, issue risk warnings and recommendations for action and monitor their implementation.
* The members of the General Council of the ECB will elect the chair of the European Systemic Risk Board.
* A European System of Financial Supervisors, comprising three new European Supervisory Authorities (ESA), should be established aimed at upgrading the quality and consistency of national supervision, strengthening oversight of cross border groups through the setting up of supervisory colleges and establishing a European single rule book applicable to all financial institutions in the Single Market.
* Decisions taken by the European Supervisory Authorities should not impinge in any way on the fiscal responsibilities of Member States.
* The European System of Financial Supervisors should have binding and proportionate decision-making powers in respect of whether supervisors are meeting their requirements under a single rule book and relevant Community law and in the case of disagreement between the home and host state supervisors.
* ESAs should also have supervisory powers for credit rating agencies. The European Council further emphasises the importance of ensuring that the new framework supports sound and competitive EU financial markets.
* The legislative proposals to put in place the new framework for EU supervision should be brought forward to the autumn of this year and these proposals need to be adopted swiftly in order for the new framework to be fully in place in the course of 2010.
* EU leaders will take stock of progress at its meeting in October 2009 and will if necessary provide further direction.
* The European Commission should make concrete proposals for how the European System of Financial Supervisors could play a strong coordinating role among supervisors in crisis situations, while fully respecting the responsibilities of national authorities in preserving financial stability and in crisis management in relation to potential fiscal consequences and fully respecting central banks' responsibilities, in particular with regard to the provision of emergency liquidity assistance.
Our top photos from the last 24 hours.