EU executive proposes raft of new financial rules

By Huw Jones

BRUSSELS (Reuters) - The European Union's executive arm proposed a raft of measures on Wednesday to make financial markets and institutions safer for investors.

The worst financial crisis in decades has tipped the 27-country bloc's economy into a downturn and pushed up unemployment, sparking a radical global rethink of how markets and banks are regulated.

"We must send a strong signal to our citizens, businesses and the global community that there is a way out of this crisis," European Commission President Jose Manuel Barroso told a news conference.

The measures, to be presented to EU leaders later this month for broad endorsement, are in line with a draft of the plan obtained by Reuters on Tuesday.

They are also part of the EU's response to moves by the G20 group of industrial and big emerging countries toward a global approach to reforming financial rules.

Measures in the Commission's package range from tougher bank capital rules to streamlining supervision, more transparency in derivatives markets and proposals to penalizing banks whose remuneration policies encourage excessive risk-taking.

"There should be no financial entity that escapes from financial regulation, neither in Europe nor the rest of the world," Barroso said.

"All financial entities should be subject to a certain degree of regulation and supervision. No territory, state or individual can separate and work underground," Barroso said.