EU Business Group: New Financial Rules Should Be "Proportionate"

BRUSSELS -- New regulations for financial markets should be "proportionate," BusinessEurope, the European Union's largest business lobby, and other financial-sector lobby groups said Friday.

BusinessEurope, along with organizations representing E.U. banks, venture capital groups and other financial firms, said in a joint statement that the recent financial crisis has exposed the need for new regulations.

But the groups added that regulation shouldn't "undermine innovation, market integration and competitiveness."

The European Commission, the E.U.'s executive arm, Wednesday proposed a more centralized system for financial-market oversight in the bloc. The lobby groups didn't directly comment on this proposal, but echoed some of its content, saying the E.U. needs more cooperation among national authorities and better tools for dealing with crises.

E.U. policy makers and leaders from the Group of 20 industrialized and developing nations are discussing limits for executive pay. BusinessEurope and the other lobby groups said "remuneration policies should appropriately reward talent and be aligned with sound risk management."

The European Banking Federation, which signed this joint statement, said separately that new regulations, such as higher capital requirements, could have unintended consequences.

It said regulators shouldn't force banks to boost their capital at a time when lending to businesses and households need credit.

Any new capital increases for banks should wait "until the economic situation has improved and both the real economy and the financial markets have stabilized," the group said.