Jean-Claude Trichet (president of the European Central Bank) addressed the Committee of European Securities Regulators (CESR) in Paris yesterday.
Trichet stated the current crisis is a call to extend regulation to all important markets that pose fundamental risks to financial stability and oversight need to be extended to all important financial institutions and markets.
It is difficut to determine what reforms are achievable. EU member states have resisted ceding authority in this area to date. Trichet suggests that reform will centre around more centralisation and some form of "European council" of financial supervisors, perhaps similar to the board of the ECB.
With this co-ordinating overall policy issues, day-to-day supervisory work could be left to the national authorities.