The meeting is focused on the creation of a EU-wide supervisory system covering banks, insurers and securities markets, and is intended to avoid a repeat of the worldwide financial crisis prompted by Lehman’s collapse in 2008.
Both EU member states and the EU parliament need to approve the final legislation. If agreed at the current meeting the new rules could be given formal approval by the full parliament in early September. The regulations could then be implemented by next year.
The key parts of the new system; a European systemic risk board to warn about any risks to the financial system and three new pan-European supervisory authorities, covering banking, insurance and securities markets are already agreed.
Yesterday ministers agreed that the three financial authorities should be split between London, Paris and Frankfurt – rather than concentrated in Frankfurt as originally proposed.
Ministers also said EU member states, not the supervisory authorities alone, should determine when a financial emergency has arisen, eradicating fears that the supervisors could have too much power.
An idea still under discussion is that the new supervisors should be able temporarily to ban products or activities considered to be dangerous, subject to certain conditions and an appeal procedure.
The Eurozone €440bn (£369bn) rescue fund, which will lend funds to struggling EU countries if they agree to certain reforms, will be extended beyond its initial three-year planned lifespan if necessary. The fund will achieve a triple-A rating, according to Klaus Regling, chief executive of the fund.
Ministers remain divided over how much data will be published following the bank stress tests due 23 July.