The European Commission has announced the adoption of legislative proposals to strengthen financial supervision in Europe.

There will be a new European Systemic Risk Board (ESRB) to detect and warn against risks to the financial system. The legislation will also set up a European System of Financial Supervisors (ESFS), comprising national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors. The ESRB and the ESFS will, in effect, be respectively responsible for macro-prudential and micro-prudential supervision of the European financial system.

The new European Supervisory Authorities will take over the functions currently exercised by CESR, CEBS and CEIOPS and will also have additional responsibilities including:

  • Developing proposals for technical standards.
  • Resolving cases of disagreement between national supervisors, where legislation requires them to co-operate or to agree.
  • Contributing to ensuring consistent application of technical Community rules.

CEBS, CESR and CEIOPS have issued a joint press statement welcoming the Commission’s new legislative proposals.

The British Bankers’ Association (BBA) has issued a press statement welcoming the idea of a pan-European framework, but stresses that the independence of the local supervisors must be maintained.  

View Commission adopts legislative proposals to strengthen financial supervision in Europe, 23 September 2009  

View The Level 3 Committees welcome the new institutional arrangements on European financial supervision, 23 September 2009  

View Banks back improved supervision, 23 September 2009