A new momentum for the Banking Union? – MEPs cross-examine Commissioner-designate Mairead McGuinness
A game of musical chairs has landed Mairead McGuinness, the Irish candidate Commissioner to replace the outgoing Phil Hogan, with the portfolio of financial services. A crucial step on her way to becoming Commissioner is the hearing by the European Parliament. MEPs (Members of the European Parliament) screen her finances, potential conflicts of interest as well as her grasp of the key issues of her allocated portfolio. For many candidates it is as much a technical as a political exercise to win the necessary support from the house. Mairead McGuinness’ moment of truth came on 2 October.
In her opening remarks, Ms. McGuinness outlined her priorities concerning her mandate as Commissioner responsible for Financial Stability, Financial Services and the Capital Markets Union. She explained how her work as an MEP has shaped her approach to financial services, putting people at the center of her work. This is why she will prioritize a strong Banking Union with a view to stability for SMEs and households, the Capital Markets Union, a financial system which addresses climate and environmental challenges, a new digital finance strategy, and a fair financial system specifically with “zero tolerance” for money laundering.
Given her introductory remarks, many MEPs subsequently asked Ms. McGuinnes details about how she planed to strengthen the Banking Union. The Commissioner-designate answered that she will work in order to finalize the ESM backstop, the Single Resolution Fund and the European Deposit Insurance, as well as a review of both the crisis management and deposit insurance frameworks. She also confirmed Commission work on the finalization of Basel III in the EU. With the COVID-19 context very present, the issue of NPLs was also addressed during the hearings. On the latter McGuinness stated that she will work in order to conclude negotiations in relation to credit services and credit purchases and that the Commission will soon adopt an Action Plan on NPLs.
Regarding the Capital Markets Union, the course has already been set with adoption of the action plan last month. The candidate commissioner stressed in particular the need to make the convergence and insolvency processes more efficient, avoiding legal processes that impede progress, and addressing disadvantages of cross border investments.
Anti-money laundering was a recurring political issue raised by MEPs. McGuinness foresees a European supervisor which brings Member States’ FIUs together but proved reluctant to go down the additional road of a European FIU.
As the financial sector is changing very quickly and digitalisation plays more and more a key role, the issue of crypto-currencies and how to take action against the use of bitcoins in financial crime was raised by some MEPs. McGuinness stressed that as crypto-currencies represent a significant risk they should be subjected to financial supervision.
Regarding sustainable finance, Ms. McGuinness confirmed that she plans a regulation to establish green bonds at EU level in order to strengthen taxonomy. Moreover, she will support an inclusive social sustainability and put in place a fair and sustainable tax system.
A hot topic in different fields and especially concerning financial stability, some questions were raised regarding Brexit. McGuinness took the established Commission line by stressing that it is crucial to build up a European financial infrastructure and to avoid becoming too dependent on a third country for key financial services. On the matter of third country equivalence decisions McGuinness explained the necessity to first understand the UK’s vision for the regulation and the supervision of its financial sector.
In order to become Commissioner, Ms. McGuinness needs the European Parliament’s approval during a vote in plenary on 7 October. The process is expected to go smoothly after a hearing that drew praise from all major political groups. The appointment of a Commissioner by the Council is usually not considered very controversial.
By Sofia Badari and Antoine Kremer