Top EU regulator doubts need for more bank rules

By Huw Jones

BRUSSELS (Reuters) - More regulation is not the answer to the financial market's problems and there should be greater emphasis on the responsibilities of bank boards and management, a top banking supervisor said on Monday.

The worst financial crisis in 80 years has sparked calls for a radical overhaul of banking supervision, which is still country-based despite cross-border groups dominating the sector.

"We have to be careful and really evaluate what are the lessons to be learnt. I am not sure there is a need for more regulation," said Kerstin af Jochnick, chairwoman of the Committee of European Banking Supervisors.

"We have to adhere to the regulation in place. Perhaps there is a need for more supervision but the responsibility is with boards of directors in banks and insurance companies. We have to emphasise that even more. They have responsibility for what has happened," she told the European Parliament.

France has suggested a "European policeman" for the market, and European Commission President Jose Manuel Barroso said on Sunday that the EU executive would make proposals on supervision to a summit of EU leaders on Wednesday.

Creating a pan-EU supervisory agency was "not such an easy step" as bankruptcy legislation remained country-based, Jochnick told the EU assembly's economic affairs committee.

"I think it's too early to make the final conclusion on what can be done much better for the future," she added.

"My members are very tired at the moment. They are working on crisis resolution. It's not the time to talk about new ways of organising supervision," she said.