Brussels - The European Union on Wednesday set out plans to create a continent-wide network of financial watchdogs in a bid to seize the initiative ahead of Thursday's Group of 20 (G20) summit on market reform in Pittsburgh. It is the first time a group of major countries has come forward with concrete laws aimed at breaking down national barriers in the supervision of their tightly-connected money markets. EU officials hope the proposals will push other G20 members to follow suit.
"This European system can ... inspire a global one, and we will argue for that in Pittsburgh," said European Commission chief Jose Manuel Barroso, who planned to attend the Pittsburgh talks.
The draft laws proposed by the commission, the EU's executive, call for the creation of three new bodies, manned by national supervisors from each member state, to keep watch over Europe's banking and insurance sectors and the continent's stock markets.
They would be tasked with drafting EU-wide rules for their respective sectors and making sure that national authorities share critical information.
They would also be able to propose rescue deals between national governments in cases where multi-national companies ran into trouble in more than one country simultaneously.
Separately, the proposals call for the creation of a European Systemic Risk Board (ESRB) tasked with reviewing economic and business trends across the bloc.
The ESRB's job would be to spot in advance dangerous developments such as unsustainable levels of government and private borrowing or rapid exchange-rate shifts, and to warn the countries in question to change their ways.
The proposals have been criticized by commentators, who point out that the watchdogs would not have the power to force national governments to change their policies or bail out failing firms.
The supervisors "should be more than a mere club of regulators. They should have real power," the head of the socialist body in the European Parliament, Martin Schulz, said.
