In a three-hour hearing held on Wednesday, Maria Luís Albuquerque rejected calls to slash insurance laws to boost the economy, while brushing off conflict-of-interest fears from her own private sector career.
The US must implement post-crisis banking rules, despite fears an incoming Trump administration could slash regulatory protections, Portugal’s pick to be EU financial services commissioner told a European Parliament hearing on Wednesday.
Former finance minister Maria Luís Albuquerque, who needs lawmakers’ approval to become European Commissioner, brushed off concerns over conflicts of interest in her private sector career — and appeared to reject a call by Mario Draghi intended to boost competitiveness via investment from insurance companies.
“I would urge our international partners to also implement the proper framework,” Albuquerque said, adding: “I am very much aware of the need to preserve financial stability; I would not defend a race to the bottom.”
MEP Jonás Fernández (Spain/Socialists & Democrats), economic spokesperson for the Parliament’s second-largest grouping, had asked how to protect Europe against the negative impact of a future US bank regulation agenda, in comments made as it became clear that former President Donald Trump had been re-elected for a second term.
Trump and the global bargain
The EU has already had to delay measures designed to shore banks against the market risk of volatility across the financial system, known as the fundamental review of the trading book, as a similar backtracking in the US meant that directly competing banks could be operating under wildly different rulebooks.
That has also led to more general fears of unwinding financial protections — in particular as Trump might not carry out his side of the bargain in implementing international norms set by the Basel Committee on Banking Supervision, designed to prevent a repeat of the 2008 financial crisis.
Fernández accused Albuquerque of going “straight through a revolving door” when she left government to work for Arrow Global, a company specialised in buying sour loans from banks — but she argued the issue had been settled at the time, when she was a Portuguese lawmaker.
“That point was assessed by the ethics committee of the Portuguese Parliament and [it] concluded that there was no conflict of interest and no incompatibility … that issue was properly addressed where it should have been,” Albuquerque said.
“The work of an independent, non-executive director is exactly a role which is probably close to the role of a regulator than the role of an executive within the same company,” she added, of the role she has held at a number of private sector organisations, including, until August, Morgan Stanley.
Overall, Albuquerque proposed few new measures during her three-hour hearing — instead saying she’d focus on implementing existing laws, as businesses complain a wave of legislation is holding back growth.
Competitiveness boost
After a few years that’s seen a slew of Brussels regulations on issues like sustainable finance and financial technology, her approach is likely to be welcomed by the financial sector — but Albuquerque also seemed to reject calls to slash existing obligations to aid the economy.
In a recent landmark report on European competitiveness, Draghi, previously European Central bank chief and Italy’s Prime Minister, called for cutting capital requirements on insurers and pension funds to allow them to invest in innovative companies.
“We have just reviewed Solvency 2,” she said of a major reform to insurance law agreed under the last mandate and formalised by finance minsters on Tuesday, after being grilled on the topic by MEP Markus Ferber, a German MEP who’s economic coordinator for the Parliament’s centre-right European People’s Party.
“There’s still a lot of work to be done to make this agreement implementable on the ground, so I would give it some time to see if it works,” she added.
Hearings of 26 candidates to serve as European Commissioner continue until November 12 — and MEPs have already raised concerns over picking Swedish conservative Jessika Roswall to lead the European Green Deal.
If the Parliament agrees, Albuquerque could replace Ireland’s Mairead McGuinness as the EU’s top financial services official within weeks.
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