EU regulator says no emergency Lehman talks
NICE, France (Reuters) - European Union market regulators have not held any emergency talks regarding the fate of troubled U.S. investment bank Lehman Brothers, a top EU markets regulator said on Thursday.
Eddy Wymeersch, chairman of the Committee of European Securities Regulators made up of national market watchdogs from the 27 EU states, said there was no undue alarm over the bank, whose share price crashed this week.
"From my side, we have no special meetings," Wymeersch told Reuters on the sidelines of a financial services conference.
If the bank, which has big operations in London, needed rescuing, U.S. authorities would undoubtedly step in, he said.
Wymeersch, who also heads Belgium's banking and market supervisor CBFA, said markets remained nervous and tense but stock exchanges, clearing houses and settlement houses had been functioning well despite ongoing financial market turbulence.
He expects the market to recover in small steps but it will take until next year.
"Everybody agrees now that 2008 is not going to be the end," Wymeersch said. "Is the worst over? It's a little bit too early to say that."
BLACK BOX
Other challenges being faced by regulators included giving guidance to banks on how to evaluate assets whose markets have dried up, such as securitized products found at the heart of the credit crunch.
Banks have had to write down over $500 billion in such assets but Wymeersch said the guidelines EU regulators will publish later this month won't be "revolutionary" but work within existing accountancy rules.
David Wright, deputy head of the European Commission's internal market unit, said regulators still do not know the size of securitized products issuance around the world, one year after the credit crunch began unfolding.
The sum is probably over $1 trillion in Europe, he said.
"We still don't have consistently good data about the securitized market, who owns the assets, where they are and who is exposed," Wright said, likening the sector to a black box.
The Commission has asked the securitization industry to come up with data to improve transparency.
"We have to believe in the numbers. If we can't believe in the numbers we can't restore confidence in the short term."
Wright cautioned against an overly hasty regulatory response to apply lessons learned from the credit crunch.
"We have to avoid a scatter-gun member state reaction, we have to avoid unnecessary knee-jerk reaction that could cause more damage," Wright told a financial services conference.
"We have got to get the incentives right in capital markets," he said, questioning whether the EU had sufficient sanctions to stop "the excesses we have seen in the past".
(Reporting by Huw Jones; Editing by William Schomberg/Dale
Hudson/Elaine Hardcastle)
