Significant progress had been made on the issue of financial supervision at an October 1 2009 meeting of Ecofin, the European Union’s finance ministers and central bank governors, according to Sweden, currently holder of the rotating presidency of the EU.
 
On the first day of the two-day meeting, being held in Göteborg, Sweden, Ecofin discussed  the economic and financial situation, the European Commission’s proposals for a strengthened EU framework for financial supervision, and the need to enhance the EU’s financial stability arrangements.
 
Swedish finance minister Anders Borg said that he was very satisfied with the outcome of the meeting.
 
"We need to deal with difficult issues in difficult times. There is broad consensus that we must make swift progress to promote financial stability and to enhance European financial regulation and supervision," Borg said.
 
On the agenda was the the outcome of the September 24 and 25 2009 G20 summit in Pittsburgh.
 
The Swedish EU presidency statement said that the G20 agreements would now be implemented, in particular regarding restrictions on bonuses and compensation in the financial sector.
 
"The ghosts of greed cannot easily be chained down, but bankers should not underestimate the political commitment to putting a stop to the banks' harmful practices," Borg said.
 
On the economic and financial situation, ministers and governors discussed the emerging signs that the economic and financial crisis has started to bottom out and that a tentative recovery is under way.
 
However, the global financial system is still fragile and economic activity remains weak, they said.
 
Ministers and governors were also given a presentation of the EU-wide stress test and welcomed that banks in the EU are broadly able to withstand the crisis, but emphasised that banks need to continue to strengthen their financial positions.
 
Ecofin also discussed the strengthening of EU cross-border stability arrangements, and how to move forward on these issues.
 
"Stability in the financial system rests on a coherent approach to crisis prevention, management and resolution. Ministers broadly supported a range of measures to be taken in the next six to 12-month period based on a road map presented by the EFC."
 
This work will continue along two closely interrelated strands, the statement said. One is to enhance co-ordination arrangements among governments and other relevant parties. The other is more efficient regulation as regards, in particular, early intervention and bank resolution.
 
Ecofin will return to this issue at their meeting later in October.
 
The statement said that a key item at the October 1 session was the EC proposals on a new structure for financial supervision.
 
"There was broad support to deal with this very urgent issue in a swift manner, based on the conclusions of the European Council on June 18 – 19 2009, with the ambition to reach a general approach regarding the European Systemic Risk Board (ESRB) in October.
 
"This will therefore be on the agenda at the Ecofin meeting on October 20 and reported to the October 29- 30 European Council."
 
In parallel, the negotiations on the European System of Financial Supervision (ESFS) will aim to reach a general approach at the December Ecofin.
 
Both work streams will be reported to the December European Council under the Swedish Presidency.
 
Borg emphasised the importance of making progress on this topic: "It is our intention to report an agreement for the whole financial supervision package to the European Council in December, which will send a strong signal to our global partners that the EU has now taken its responsibility to strengthen the European supervisory framework."
 
Coming days will see another key meeting in the global economic crisis discussion process, with the World Bank – International Monetary Fund meeting to be held in Turkey on October 6 and 7.
 
At the meeting, the International Monetary and Financial Committee will advise the IMF’s Board of Governors and will discuss the outlook for the global economy, developments in financial markets, as well as other pressing issues within the IMF’s mandate.
 
The Development Committee will advise the Boards of Governors of the Bank and Fund on critical development issues and on the financial resources required to promote economic development in developing countries.