Memorandum of Understanding on Cooperation between the Financial Supervisory Authorities, Central Banks and Finance Ministries of the European Union on Cross-Border Financial Stability
|MEMORANDUM OF UNDERSTANDING ON COOPERATION BETWEEN THE
FINANCIAL SUPERVISORY AUTHORITIES, CENTRAL BANKS AND
FINANCE MINISTRIES OF THE EUROPEAN UNION
ON CROSS-BORDER FINANCIAL STABILITY
1 June 2008
1. As part of their continued efforts to develop EU arrangements for financial stability and deepen the co-operation between relevant authorities, and in light of the agreements reached by the ECOFIN Council in October 2006 and October 2007, the Financial Supervisory Authorities, the Central Banks and the Finance Ministries of the European Union (EU) have agreed on a new Memorandum of Understanding on co-operation in financial crisis situations (hereinafter referred to as the “Memorandum”). Ministers and Governors initiated the procedure for signing the Memorandum today.
2. The Memorandum commits all signatories to cooperate across borders between relevant authorities, both in normal times, in order to ensure preparedness for the management of a potential cross-border crisis situation; and in crisis situations. The Memorandum is designed to facilitate the management and resolution of cross-border systemic financial crises and will seek to facilitate private sector solutions, to minimise the economic and social costs, while promoting market discipline and limiting moral hazard.
3. The new Memorandum extends the previous Memorandum signed in 2005 in two ways: First, the Memorandum includes common principles on cross-border crisis management, a common framework for assessing the systemic implications of a financial crisis, and common practical guidelines for crisis management in line with the ECOFIN conclusions of 9 October 2007. Second, considering the increasing inter-linkages between financial sectors, the securities market, insurance and occupational pension supervisors have agreed to join the new Memorandum, thereby acknowledging that the involvement of a broader range of authorities is necessary.
4. The Memorandum defines practical procedures for the involvement of all relevant parties in a crisis situation, based on the existing legal responsibilities and building on existing networks of authorities. The Memorandum defines coordination mechanisms, including the identification of a national coordinating authority and a cross-border coordinating authority. As a rule, the cross-border coordinator is one of the authorities of a financial group's home-country.
5. The cooperation at a cross-border level can be enhanced further by the establishment of Cross-Border Stability Groups to focus on the issues relating to potential problems in specific firms, markets or infrastructures that are significant for all members of the group.
6. The Memorandum stipulates that sufficient cross-border procedures in normal times between all relevant authorities are put in place to enhance the availability of tools for crisis management; to ensure that decision-making processes are in place for coordinating action between countries; and to ensure preparedness for financial crisis situations, including in light of the potential need to share financial burden between Member States.
7. Taking into account the global nature of the financial markets and the need for broader international efforts in preserving financial stability, the Memorandum can also provide the basis for international cooperation between authorities; and it can be extended to include third country authorities when necessary.
8. Following the signing of the Memorandum and the positive experiences with the crisis simulation exercises carried out to date, a new EU wide crisis simulation exercise will be carried out in 2009 to test the procedures set out in the Memorandum and the use of tools for cross-border crisis management.
9. The Memorandum is a non-legally binding instrument for setting out practical arrangements aimed at promoting co-operation between authorities in crisis or potential crisis situations without overriding their respective institutional responsibilities or restricting their capacity for independent and timely decision-making in their respective fields of competence, notably with regard to the conduct of day-to-day tasks of relevant authorities, as set out in national and Community legislation. The Memorandum is based on the current institutional and legislative framework but does not preclude any possible changes to the current framework in the future.
|©||European Union, http://eur-lex.europa.eu/. It is permitted to reuse this legislation on the condition that the following disclaimer is noted:|
|“||Only European Union legislation printed in the paper edition of the Official Journal of the European Union is deemed authentic.”|
||This page and licence template are being considered for potential deletion at Possible copyright violations. Please see the discussion there.|
|This work is in the public domain in the U.S. because it is an edict of a government, local or foreign. See § 206.01 of the Compendium II: Copyright Office Practices. Such documents include "judicial opinions, administrative rulings, legislative enactments, public ordinances, and similar official legal documents."
These do not include works of the Organization of American States, United Nations, or any of the UN specialized agencies. See Compendium II § 206.03 and 17 U.S.C. 104(b)(5).
PD-in-USGov}}, the above U.S. Copyright Office Practice does not prevent U.S. states or localities from holding copyright abroad, depending on foreign copyright laws and regulations.