jacques-larosiereJacques de Larosière, former governor of the Bank of France, former director of the IMF, adviser to BNP Paribas and president of the Strategy Committee of the French Treasury Department, gave the keynote address in the latest edition of the IE Business School Leadership Forum. Larosière is currently President of the Larosière Group , comprised of eight experts in economy brought together to analyze the causes of the financial crisis and advise on the future European system of regulation and supervision.

In his address to the CEOS and directors of leading Spanish and multinational companies who participated in the Leadership Forum, Jacques de Larosière analyzed the current financial situation and the future European system of regulation and supervision. The main conclusions of the report issued by the Group presided by Larosiêre include the creation of a European Financial Supervision System with microprudential functions aimed at supervising financial entities, and a European Committee of Systemic Risk with macroprudential functions designed to manage the current crisis and propose prevention measures.

Larosière talked of creating a European banking supervision system to enable the prevention of future crises. He commented that he had found some solutions to the current situation but not the solution. Larosière recommended a more integrated supervision system for Europe, but without going as far as having a sole supervisor.

As a former director of the IMF, Jacques de Larosière is aware that the banking business model has changed and that the current rules of the game require banks to be more client-focused. Hence Larosière advocates the collection and analysis of all available information on the financial system to pinpoint potential risk and provide assessment on correctional measures before another crisis occurs, all this on a long-term basis. With regard to those responsible for the current crisis, Larosière talked about global responsibility shared by a range of players, from politicians to regulators, supervisors and central banks, adding that the system has to be cleaned up in order to normalize the market to establish a commitment to quality assets.

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