Corporate banking 'will have greater supervision' under new EU rules

Corporate banking groups will find their regulation is subject to greater supervision under proposed new rules from the European Union (EU), it has been stated.

Martin Bamford, chartered financial planner at Informed Choice, notes the revised measures must tread a careful line between preventing future problems, while not putting economic recovery at risk due to excessively restrictive legislation.

Earlier this month it was revealed EU authorities are to be granted stronger powers to ban corporate banking products and activities considered too risky, with more rights to intervene if national regulators are thought not to have taken appropriate action.

Known as EU Supervisory Authorities, (ESA), they should be active by early 2011 and will also have the ability to resolve disputes between countries' financial supervisors.

Speaking of the new ESA regulations, Mr Bamford remarked: "Only time will tell if this move goes far enough," with corporate banks no doubt anxious the rules should not impinge upon their business. ADNFCR-2318-ID-800054635-ADNFCR