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EU Commission President Barroso  Unveils Plan to Stem Future Financial Crises

The European Union's executive arm has proposed far-reaching financial reforms to help prevent future financial crises, like the one now pummelling Europe and the rest of the world. European officials hope to put the reforms in place next year.

The reforms proposed by the European Commission, the European Union executive arm, include a tough, new, cross-border monitoring system for banks and other financial institutions.

If approved, the reforms would set up two new bodies. The first, a risk council made up of financial bankers and financial regulators, would serve as a sort of early warning system to prevent future financial crises.

The European Commission has also proposed a new steering group aimed to ensure European financial rules are applied consistently across the 27-member European Union.

The commission wants the reforms to be in place by 2010, two years earlier than first proposed. At a press conference in Brussels, European Commission President Jose Manuel Barroso said it is critical to move swiftly.

"Now is the time for action. It will be now or never If we cannot reform the financial sector, financial supervision when we have a real crisis, when will we reform? I am determined to reform the financial supervision in Europe. I can only hope the member states will follow us," Barroso said.

The financial crisis has plunged European countries into major recessions and many workers have been laid off. Still, Barroso said that millions of dollars of money spent on stimulus measures were beginning to pay off.

"The measures we have taken to tackle the crisis are starting to work. But fiscal stimulus by definition is temporary. The real economy needs ethical, financial markets if it is to prosper," he said.

Barroso hopes the EU members will sign off on the proposals when their leaders meet for a summit in June.