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EU's Barroso set to call for faster financial reform

BRUSSELS (Reuters) - European Commission President Jose Manuel Barroso will push for a quicker pace of financial reform in the 27-country bloc next week, officials said on Friday.

Next Wednesday, the head of the European executive plans to ask member states to act more promptly on fresh proposals to change laws for a financial industry that is blamed for triggering the worst economic slump in a generation.

The European Union is embarking on an overhaul of rules for the sector, ranging from curbs on bonuses to demanding lenders set aside more for unpaid loans.

“The idea is to seek a commitment from countries to deal with reforms as soon as possible when they are put on the table,” said one official, who asked not to be named. “We want a unified strong political message on reform.”

Michel Barnier, the EU’s financial markets chief, plans to join Barroso and economics and monetary commissioner Olli Rehn at an event on Wednesday to outline his vision for a regulatory overhaul, the officials said.

In particular, the former French foreign minister will examine the role of credit rating agencies, viewed critically in Brussels after they downgraded struggling countries while Euro zone members scrambled to win back market confidence.

“We will deal with how the credit rating agencies fit into the new supervisory structures that we will be creating over the next few months,” said one official, referring to powerful new pan-European watchdogs for financial services.

Late on Friday, Fitch downgraded Spain’s credit rating.

The European Commission is also mulling how to improve the effectiveness of non-executive directors at banks, according to a document seen by Reuters which blames these managers for failing to spot trouble ahead.

Officials are suggesting a cap on the number of company posts they can take.

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