On 1 January 2011, Europe will get a new financial supervision system: the European System of Financial Supervisors ("ESFS").
The new system should lead to improved supervision and a more efficient dialogue between market parties in Europe. The system will consist of the European Systemic Risk Board ("ESRB") and three new European supervisors: the European Securities and Markets Authority ("ESMA"), the European Banking Authority ("EBA"), and the European Insurance and Occupational Pensions Authority ("EIOPA"). The current supervisory bodies - CESR, CEBS and CEIOPS – will be transformed into new supervisors. For the time being, the ESRB will be housed in the offices of the European Central Bank.
The three new supervisors, representing 27 national supervisory bodies, will have powers enabling faster action than is currently the case. They may impose rules and directives and (temporary) prohibitions, but will also be able to mediate in discussions between national supervisors. The ESRB will monitor risks in the European economies and issue warnings where it considers such risks as becoming too great.
In the Financial Supervision Package – FAQ the European Parliament gives a further explanation about the Financial Supervision Package.