European Parliament rejects derivatives market protectionism

5.22.00pm BST (GMT +0100) Wed 2nd Jun 2010

European Parliament in Strasbourg

Sharon Bowles today welcomed the decision of the European Parliament's Economic and Monetary Affairs Committee to reject an openly protectionist approach to the regulation of derivatives markets.

Sharon said:

"It is essential that users of derivatives are not forced to clear them within the European Union, almost regardless of type. This would provoke similar measures in other jurisdictions without providing a marked benefit.

"I am glad that the committee was persuaded to support an approach through which clearing houses in third countries is subject to thorough equivalence requirements, including ensuring cooperation and information exchange with EU supervisors.

"This will achieve the aim of high-quality supervision and detection of systemic risk, while also taking into account the fact that in many cases only one of the contracting parties to a derivatives contract will be situated in the EU.

"The committee also accepted my suggestions concerning the central role of liquidity in whether a product should be centrally cleared, the resilience of bilateral derivatives contracts, and the importance of open access to, and clear rules on, the ownership and governance of clearing houses.

"I am optimistic the European Commission has been listening closely to the Parliament and will take our views into account when it submits its proposals later this month."

The vote on the Economic and Monetary Affairs Committee's report will be held during the next plenary session of the European Parliament.

ENDS