No Bank Will Escape from Regulation: EU Officials

"No one" will escape sensible and intelligent regulation and supervision in the financial sector, Michel Barnier, the European Union Commissioner for financial services has warned in an interview.


Speaking to CNBC over the weekend from the shores of Lake Como in Italy, the French Commissioner said he will be working hard on producing concrete rules by September 15.

"The two texts, one on short selling and the other one on derivatives, are proposals we shall make later this month," Barnier said.

They are in line with "the G20 commitments we all undertook and very much in line with what the Americans have just announced that they will be doing," he added

The proposed changes will be imposed on all, with no exceptions, according to Barnier.

"No actor, no product, no sector, no territory should no longer be able to escape sensible and intelligent regulation and supervision," he warned. "We need to recall that the derivatives sector is an extraordinarily important sector where we need to bring transparency, registration, and compensation."

European Central Bank president Jean-Claude Trichet, who will be meeting with Barnier in Brussels later Monday, told CNBC in an exclusive interview that the next few days will be crucial.

"I will only say the following. I know that there are a lot of comments, resistance perhaps in certain domain, but let's look at the situation with maximum lucidity," Trichet said. "We went through the worst crisis since World War Two, had we not acted so resolutely, we would have had the worst depression probably since World War One."

"We could avoid that by putting on the table 27 percent of our gross domestic product in taxpayer risk… of course it was not utilized at 27 percent but it was a risk," he explained.

"There is an obligation that what will come out of this Basel III exercise… we have to be sure that the global system is more resilient. It is a must," Trichet said.

Meanwhile, banks should be made to pay for the crisis by getting involved in the 110 billion euros ($142 billion) EU bailout for Greece, Slovakia's Prime Minister Iveta Radicova told a Greek newspaper.

Radicova told Greek daily paper To Vima that her country will support the proposal to aid Greece if banks will also contribute, since they are "directly responsible."