Chair, Honourable members,
Thank you for this opportunity to speak to you today.
We regret the decision taken by the British electorate on 23 June, but we must respect it.
Commissioner Hill decided to stand down. I respect that decision, even though I am sorry to lose such a trusted colleague. I would like to pay tribute to Lord Hill’s professionalism, commitment and our very good cooperation. I wish him well for the future.
These are challenging times for the European Union.
Managing the post-referendum process will require difficult economic and political decisions - at a time when Europe also faces other important challenges such as migration and security.
The financial services sector will be among those most affected by any change in the EU's relationship with the UK. We do not know exactly what our future relationship with the UK will look like. We hope the UK can remain a close partner. Until the UK leaves, it remains a full member of the European Union, with all the rights and obligations this entails.
At the same time, the other 27 Member States made it clear: any future agreement concluded with the UK as a third country, would have to balance rights and obligations.
Access to the Single Market would require the UK to accept all four freedoms: goods, services, capital and labour. There can be no cherry-picking.
In this situation, President Juncker has asked me to take over responsibility for files on Financial Stability, Financial Services and the Capital Markets Union from 16 July.
I wish it had been under better circumstances, but this is a challenge I am ready to take on.
As Vice President of the European Commission, I have already been responsible for coordinating part of this portfolio, including the Banking Union, policies related to deepening EMU and to prevent terrorism financing.
In this role, I would also draw on my own experience as an MEP before becoming Commission Vice President.
Before going into more detail, let me set out my approach to the financial sector in Europe. The main role and responsibility of the financial sector is to:
Finance the real economy;
Support investment; and
Sustain Europe's social market economy.
That’s how we can support financing for start-ups and SMEs. That's how we can help people to manage their finances effectively, save for education or retirement, or insure themselves against ill-health.
As a result of the crisis, we strengthened the regulatory architecture of the financial sector. Today, Europe's financial sector is on a more solid footing than before the crisis. Credit to the economy is improving steadily. Our banks are stronger and better capitalised. But Europe's banks, insurers and investment firms face new challenges.
Going forward, we need to ensure a regulatory framework that strikes the right balance. This requires:
A strong and credible prudential basis, to weather difficult times;
Regulation that allows financing of the real economy, and maintains all elements of the chain needed for a well-functioning financial sector; and
A framework that is open to new economic, technological and societal developments, and encourages restructuring of the sector where necessary.
Relationship between the Euro Area and the EU as a whole
The EU remains a union with an internal market for ALL Member States, and a single currency shared by many.
This is reflected in my current portfolio. As Vice President for the Euro, I also coordinate the European Semester which involves all Member States.
It is clearly important to complete the Economic and Monetary Union and to make it more resilient. It is also clear that the single market for financial services should build on the strength of all Member States – with the Single Rulebook at its heart.
Building a Resilient banking sector
Recent events sent shockwaves through the global financial system.
This reminds us of the importance of properly implementing and enforcing the EU's new regulatory framework - to create a more resilient banking sector, and to protect depositors and taxpayers.
On the Bank Recovery and Resolution Directive and the Deposit Guarantee Scheme Directive, we're nearly there. We'll keep up the pressure until all Member States are over the line.
We also need to finish some of the level 2 legislation to bring the BRRD and other rules fully into effect, and to make sure that, in the coming months, our proposals on TLAC fit intelligently with MREL.
It is important to keep the momentum to complete the Banking Union.
I welcome that Ministers have committed themselves to setting up a common backstop to the Single Resolution Fund. Technical work on this will start very soon.
Our proposal to put in place a European Deposit Insurance Scheme is the missing third pillar of the Banking Union.
It is also part of a much broader plan to deepen the Economic and Monetary Union.
Work on EDIS is now very much in the hands of the co-legislators. I want to move this forward with you in the coming weeks and months.
The European Parliament is our natural partner and we share your view that we do not need an intergovernmental agreement to finalise it.
EDIS will need to go in parallel with further measures to reduce risk in the banking sector.
Our proposals on TLAC, the CRD and CRR will be on the table before the end of the year.
We will continue to make sure Basel standards are applied in a way that works for Europe. We need to ensure that European positions in Basel and other international fora are fully coordinated.
Your own-initiative report is a welcome contribution to the debate on the activities of such international fora.
Capital Markets Union
To support growth and investment, I am committed to continuing Lord Hill’s important work to build a Capital Markets Union.
I will be cooperating closely with Vice President Katainen in this area.
The possibility of Europe's largest financial centre moving outside the EU, makes the case for deeper capital markets across the EU all the more urgent.
The Capital Markets Union is a Single Market project for all Member States. It will also make EMU more resilient, as integrated capital markets help to better absorb shocks.
We will be reviewing progress on CMU next year to see what follow up is needed to existing proposals and actions and to consider what more can be done.
But our immediate focus will be to reach agreement on existing proposals.
I hope we can finalise work soon to create a prospectus regime that's simpler, faster and cheaper for all companies wanting to raise financing on public markets.
I look forward to working with you to make progress on the Commission's proposals on Simple, Transparent and Standardised securitisation. Giving consumers more choice and better quality in retail financial services will remain a priority.
We are now busy analysing responses to the consultation based on our Green Paper. We intend to come forward with the Commission's thinking in the autumn.
Green finance and fin tech are two areas I would like to look at more closely, and we will look at ways to encourage institutional investors to take account of sustainability considerations in their investment policies.
Reducing risk and evidence-based policy
Across the board, we are committed to pursuing evidenced-based policymaking that ensures financial services are safe and support growth.
We will take forward the call for evidence to check that our legislation is working as intended and to make changes where the same prudential results can be achieved in a more growth-friendly way.
We'll complete financial sector reforms to address remaining risks in the system. For example, now that we have required more clearing of derivatives to be done through central counterparties - CCPs - we need a system to resolve them if something goes wrong.
To conclude, this is just a snapshot of some of the areas I believe are key to this portfolio. It's a heavy agenda, behind which good momentum has been built. I look forward to working together with you in a spirit of good cooperation to drive this agenda forward.