The European Commission’s suggestion that the European supervisory authorities with responsibility for insurance (the European Insurance and Occupational Pensions Authority or EIOPA) and banking (the European Banking Authority or EBA) should merge has caused controversy, with both industries criticising the suggestion.
A consultation by the European Commission, which closed recently, had suggested that the merger could make the EU supervisory regime more effective and efficient.
However, Insurance Europe, the European (re)insurance federation, last week stated that the loss of EIOPA, a dedicated insurance supervisor, would reduce the quality of European insurance supervision. The EBA has now added to the dissenting voices, stating that the merger would create “no material benefit”. It went on to suggest that, rather than creating costs savings, a merger would in fact create additional pressure on “already very slim” resources.
The EBA is currently based in London, so will need to relocate before the UK formally leaves the EU. It appears that some European countries, such as France and Germany are already manoeuvering themselves into a position to welcome the EBA to their shores, with a German finance ministry spokesperson publicly advocating moving the EBA to Frankfurt. Whether this also naturally results in a merger with the Frankfurt-based EIOPA remains to be seen.