Brussels, 26 October 2009
Financial services: Commission adopts additional legislative proposals to strengthen financial supervision in Europe
The European Commission has adopted additional legislative proposals today to further strengthen financial supervision in Europe. Following the adoption of a legislative package to strengthen financial supervision in Europe on 23 September 2009, including the creation of a European System of Financial Supervisors with three new European Supervisory Authorities, the Commission proposes to make targeted changes to existing financial services legislation to ensure that the new Authorities can work effectively. In particular, these proposals lay down in detail the scope for the Authorities to exercise their powers, ensuring a more harmonised set of financial rules through the possibility to develop draft technical standards, settle disagreements between national supervisors and facilitate the sharing of micro-prudential information. The package will now be sent on to the Council and the European Parliament for consideration.
Internal Market and Services Commissioner Charlie McCreevy said "This proposal complements and reinforces our supervision package of 23 September and provides more detail about precisely what powers are proposed for the new European Supervisory Authorities and in what areas. I urge the Council and the Parliament to adopt the whole supervision package in good time to allow the new Authorities to come into being at the end of 2010, if not before."
Today's legislative proposals complement a package of proposals on financial supervision presented by the Commission on 23 September ( ). In addition to proposals to create a European Systemic Risk Board, the package envisages the creation of a European System of Financial Supervisors (ESFS) for the supervision of individual financial institutions ("micro-prudential supervision"). The ESFS will consist of a network of national financial supervisors working in tandem with new European Supervisory Authorities, created by the transformation of existing Committees for the banking, securities and insurance and occupational pensions sectors 1 . There will be a European Banking Authority (EBA), a European Insurance and Occupational Pensions Authority (EIOPA), and a European Securities and Markets Authority (ESMA).
The new Authorities in the ESFS will take over all of the functions of the existing committees, and in addition have certain extra competences, including the following:
In order for the ESFS to work effectively, changes to existing financial services Directives are necessary, laying down the precise scope for them to exercise certain of the proposed new powers. The areas in which amendments are proposed fall broadly into the following categories:
Further proposals for technical amendments to sectoral Directives are envisaged by the Commission early in 2010, in particular in the insurance sector, which is not covered by the current proposal.
The Commission's supervision proposals are currently being considered by the Council and Parliament, and creation of the new Authorities is envisaged for the end of 2010. The proposals are an integral part of the Commission's strategy for preventing future crises.
More information is available at:
Currently there are three financial services committees for micro-financial supervision (supervision of individual financial institutions) at EU level, with advisory powers only: the Committee of European Banking Supervisors (CEBS), Committee of European Insurance and Occupational Pensions Committee (CEIOPS) and the Committee of European Securities Regulators (CESR).