The European Commission has published a speech by Charlie McCreevy (European Commissioner for Internal Market and Services) entitled Towards a new supervisory architecture in Europe.  

In his speech Commissioner McCreevy (CM) discusses the de Larosière report. The Commission has currently received 115 responses to the report. Respondents generally support the direction of the de Larosière recommendations with many providing detailed comments on:  

  • The precise powers and composition of both micro- and macro-supervisors.
  • The type of information that is needed for proper macro-prudential supervision.
  • Concerns over confidentiality of data that is exchanged between the micro- and macro-bodies.
  • The way in which these bodies consult consumers and the industry.
  • Issues of subsidiarity.
  • CM states that in line with the recommendations from the de Larosière report the Commission will soon present the details of an enhanced European financial supervisory framework based on two pillars.  

The first pillar is the European Systemic Risk Council (ESRC). The ESRC will monitor and assess the risks to the stability of the financial system as a whole. It will provide early warning of systemic risks and, where necessary, present recommendations for action to address these risks. The creation of the ESRC would address one of the fundamental weaknesses highlighted by the financial crisis, which is the exposure of the financial system to interconnected, complex, sectoral and cross-sectoral systemic risks.  

The second pillar is the creation of the European System of Financial Supervisors (ESFS) consisting of a network of national supervisors working in tandem with the new European Supervisory Authorities.  

CM then discusses flanking measures, stating that the reforms to the European supervisory framework should be “flanked by an ambitious effort to equip the EU with a single harmonised rulebook by removing the many national options and discretions from EU-financial regulation.”  

The Commission is committed to adopting a Communication on supervision on 27 May 2009 and to come forward with legislative proposals in the autumn.  

View EC speech - Towards a new supervisory architecture in Europe, 7 May 2009