(Repeats story first published on April 13, text unchanged)
By Huw Jones
LONDON, April 13 (Reuters) - The European Union will sign off on a slew of major reforms this week to allow failing banks to be wound down without public money, clearing its desk before elections in May that may lead to a slower pace of legislation.
This week is the final plenary session of the European Parliament before it breaks up ahead of the vote in May.
The welter of rules the bloc has approved since the worst financial crisis in a generation began unfolding from a corner of the U.S. housing market in 2007 is fundamentally reshaping the banking and securities industry.
The rule changes also strengthen the bloc’s grip on capital markets at the expense of national governments to an extent few federalists would have dared to dream of, as policymakers want to avoid more taxpayer bailouts of banks and euro zone countries.
From November, the European Central Bank will directly supervise top lenders in the single currency area, adding to three new EU regulators for banks, insurers and markets launched in 2011 with binding powers over member states.
“There is no question that the regulatory tidal wave and centralisation have been triggered by the crisis,” said Nicolas Veron, EU policy specialist at Brussels think tank Bruegel.
“After this week, I think a pause is unlikely but a deceleration would be good. There will be a lot of legislative activity, but I am not sure it will be as frantic as it was in the last five years,” Veron said.
On Tuesday the European Parliament will approve two major reforms to make it easier and quicker to close failing banks so they don’t collapse messily or require taxpayer money.
It will also rubber-stamp a sweeping reform of securities markets that will draw commodities under the regulatory net for the first time, and crack down on high frequency trading, a type of ultra fast computerised trading the FBI is probing.
It is the assembly’s last plenary session before it goes into recess as lawmakers campaign ahead of elections in May.
The new parliament won’t be fully up and running until September, and even then will focus on the appointment of a new European Commission, the bloc’s executive body that helps set and steer the EU agenda.
It involves lengthy horse-trading among governments for top jobs like financial services commissioner, who has sole power to propose regulation, which incumbent Michel Barnier used fully to the dismay of Britain’s City of London banking district.
The new commission takes up the reins in November, if all goes to plan - and last time it was several months late - meaning the tempo of rulemaking may slow down until early 2015.
Scrutiny of key legislation that failed to make it across the finishing line before the May elections will then resume, including some of the most controversial items Barnier proposed.
Reform of money market funds, a law to regulate benchmarks - after banks were fined for rigging Libor interest rates - and plans to change the structure of lenders to curb risks from trading are at the top of the in-tray.
After May, banking lobbies will assess which of the new range of lawmakers to target, as some polls predict gains for anti-Europe parties, while some well-known members will stand down.
Parliament has joint say with member states on financial rulemaking and has been more aggressive in pushing through stricter rules, such as the cap on bankers’ bonuses.
“In some ways parliament will write the script for the regulatory framework,” said Graham Bishop, a former banker who advises EU institutions on regulation.
Barnier has been able to use the crisis to justify going further than reform pledges agreed at the global level, such as on auditing, hedge funds, bank bonuses and credit rating agencies.
The focus of the new parliament and commission will be on boosting growth with several people already warning that giving banks too much of a hard time now that the crisis is largely over will crimp their ability to lend.
The pace of future reform hinges on three things: the appetite of Barnier’s successor for change, what member states are willing to accept given all the rules already approved, and the desire of parliament to set the agenda.
Even if few new laws are proposed, those passed since the crisis are already stuffed with clauses requiring regular reviews, offering lawmakers an easy way to toughen them up.
“What’s alarming is that a whole body of existing rules will come up for review twice in the next parliament,” Bishop said.
In the meantime, the banking sector will keep an eye on whether Britain, which is challenging some EU rules in the bloc’s top court, succeeds in the coming months in drawing a line under further centralisation, let alone in rowing back on measures already approved. (Editing by Hugh Lawson)