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Brussels, 30 January 2007

Inter-institutional Monitoring Group proposes improvements to the development of financial services regulation

The Inter-institutional Monitoring Group (IIMG) has published its second interim report on the "Lamfalussy process", a four-level regulatory approach to the development of financial services regulation which aims to allow the EU to respond rapidly and flexibly to developments in financial markets to achieve greater market integration and improved competitiveness. Based on the analysis its first interim report and on evidence given by stakeholders, the Group's second interim report provides some preliminary recommendations to improve what has been, overall, a successful process. The second interim report is open for public consultation until 26 March 2007.

Following the publication of its first interim report, which identified a number of unresolved questions and uncertainties the Group held two non-public consultations with stakeholders closely involved in the Lamfalussy process.

In its second interim report the Group calls for "regulatory self-restraint" at all levels of the process and suggests that Levels 1 and 2 work – to a certain extent – in parallel. The Group believes that the choice between Directives and Regulations is not straightforward and suggests some guiding principles to choose between the two instruments. The Group supports consultation at all levels, but warns against overlaps. There is also strong support for impact assessment at all levels. The Group believes further efforts are needed to improve cooperation between supervisors. This issue will receive particular attention in the Group's final report.

The Group now invites all interested parties to comment on the progress made on the implementation of the Lamfalussy process and on the Group's preliminary views set out in its second interim report. The comments will be taken into account for the determination of the Group's final recommendations and conclusions, which will be presented in the form of a final report in autumn 2007.
Responses should be sent by 26 March 2007 to:
The Group's first and second interim reports are available at:


The Lamfalussy process is a four-level regulatory approach which aims to create a more efficient system for the EU institutions to prepare, adopt and implement new legislation to integrate financial markets. The process was named after the Chair of the 'Committee of Wise Men' who created it, Baron Alexandre Lamfalussy. Each of its four levels represents a different stage in the regulatory process. Framework principles establishing the core values of a new law are adopted at Level 1 by normal co-decision procedure. Sector-specific comitology committees and committees of national supervisors assist the European Commission in determining how to implement the details of the Level 1 framework at Level 2. Level 3 comprises enhanced supervisory cooperation and convergence to ensure consistent and equivalent transposition of the new rules. Implementation and enforcement of EU law is Level 4 of the process.

The Inter-institutional Monitoring Group has a mandate to assess the progress made on implementing the Lamfalussy process and identify possible emerging bottlenecks in this process, and is composed of six independent experts[[1]], of which each institution nominated two.

[[1]] Dr. Karl-Peter SCHACKMANN-FALLIS (Germany), Executive Member of the Board of the German Savings Banks Association; Mr Freddy VAN den SPIEGEL (Belgium), Chief Economist and Director of Public Affairs, Fortis Bank; Mr Johnny ÅKERHOLM (Finland), President and CEO of the Nordic Investment Bank (NIB); Mr Rainer MASERA (Italy), Professor of Banking, Luiss University; Mr Mark HARDING (United Kingdom), Group General Counsel, Barclays Bank; Mr Pierre DE LAUZUN (France), Chief Executive, French Association of Investment Firms (AFEI) and Deputy Director General, French Banking Federation (FBF).

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