The global financial crisis impact over the reformation of the financial surveillance architecture in EU: prospects and implications

Abstract

The current crisis has revealed the existence of certain fundamental weaknesses in the functioning of financial markets and weaknesses in risk management, which require a deep reform of the financial regulatory and supervisory framework. The magnitude of the current crisis has brought new attention to issues of transparency and liquidity of financial systems. The current crisis is further proof that free markets are not up to the deregulated markets and that excessive confidence in the self-healing powers / regulation of markets is very dangerous. We must keep in mind that financial innovation benefits when supporting dynamism and growth, but at the same time can lead to additional risks. In the context of maintaining international financial crisis and the consequences of measures taken to counteract its effects, the reconfiguration problem of the supervisory architecture and how it should ensure the smooth functioning of global and regional financial markets came to the attention of public authorities responsible to issue regulations, best practices and rules in areas which exert a significant influence in achieving this objective. This paper focuses on the structural causes of the current global crisis expressed by several authors and their views on the need to implement new supervisory architecture internationally and regionally, to ensure global financial stability.