The European Commission released a “Green Paper on Corporate Governance in Financial Institutions and Remuneration Policies” (in financial institutions and listed companies) on June 2nd, 2010, which opens a large public consultation on this topic that will end by September 1st, 2010.

The so-called “European Executive” explains that this document is part of a global package which aims at contributing to the prevention of a future financial crisis and at strengthening the financial system. And indeed, the Green Paper has been presented jointly with a proposal from the Commission to increase the supervision of Credit Rating Agencies.

Internal Market and Services Commissioner Michel Barnier explained that the European Commission considers that “true crisis prevention starts from within companies […] financial institutions themselves need to change. We need to ensure more effective internal controls; promote better risk management; strengthen the role of supervisory authorities; and existing rules on sound remuneration policies should be implemented quickly to help curb excessive risk-taking”.

More information to be found in the July 2010 EChr newsletter.