Belfast Telegraph

Hit rogue banks hard, says EU commissoner

Banks and other financial services bodies breaking Europe's new economic supervision rules should face UK-style multi-million pound fines, Europe's single market chief Michel Barnier has said.

He called for harmonised minimum penalties for market rigging and manipulation -citing the UK's Financial Services Authority (FSA) as the benchmark for sanctions.

Mr Barnier, expected to produce formal proposals next year, said the problem was that national penalties varied hugely across the EU - from just €150,000 (£127,000) to a few millions. "We are dealing with something to do with whether people are respecting regulations, and, if they are not, something needs to be done," he told a Brussels press conference.

"We need good regulations which are respected, reinforced by harmonised penalties. There is a risk from financial institutions that do not respect the rules of the market place. Traders and those responsible must realise that they will be hit hard if there is malpractice."

Mr Barnier said that about seven EU countries currently hand out fines for malpractice of around €150,000, while others impose sanctions of several million. The UK sanctions regime is considered to be the toughest across the EU.

The FSA recently imposed a fine of £17.5m on Goldman Sachs for failure to reveal that it was under investigation by the American authorities, or "non-transmission of information to supervisory authorities in the banking sector".

Mr Barnier said: "Member States will have some flexibility when it comes to applying sanctions.

"But there are good reasons for setting minimum sanctions on key issues so that they have a dissuasive effect".

Mr Barnier said a system of harmonised minimum sanctions was the obvious follow-up to moves already made to bolster national financial supervision measures with a series of EU-level authorities.

The supervisory bodies, including one based in London, come into operation next month, but now a system of effective EU-wide sanctions was needed, said Mr Barnier.

Mr Barnier said he expected to make proposals by next June, after feedback from governments and financial institutions following the launch of consultations.