In May 2008, the European Commission published a consultation paper on amendments to the decisions establishing the Lamfalussy Level Three Committees (CESR, CEBS and CEIOPS).
HM Treasury and the FSA (together the UK Authorities) have now jointly responded to the Commission’s consultation paper. Key comments from the UK Authorities include:
- Supervisory cooperation and convergence. The Commission’s consultation paper states that one of the tasks of the Level 3 Committees is to contribute to the timely and consistent implementation of Community legislation in Member States, through the coherent implementation and application of supervisory rules. The UK Authorities agree that the Level 3 Committees have a strong role to play in this process. However, the UK Authorities state that the implementation of EU legislation will be for Member States to take forward and for the Commission to ensure it is implemented properly. The Level 3 Committees are not, and should not be, the overseer or supervisor of national regulators.
- Mediation. The UK Authorities support the Level 3 Committees providing a mediation mechanism, such as the one they already provide for their members. However, the UK Authorities do not agree that recourse to mediation is a measure of success, or that supervisors should be positively encouraged to go down this route. The UK Authorities do not believe that changes to the existing mechanisms established by the Level 3 Committees are necessary.
- Consultative role. The UK Authorities do not believe that the Level 3 Committees have an obligatory consultation role (which is distinct to a mediation role).
- Information Exchange. The UK Authorities believe that information exchange about specific institutions should occur bilaterally or within the Supervisory Colleges established for that purpose. The UK Authorities only support a general information exchange requirement in the Decisions, in line with the Ecofin conclusions of May 2008.
- Delegation of tasks and responsibilities. The UK Authorities support the voluntary delegation of tasks between supervisors, and the Level 3 Committees could possibly play a role in facilitating such delegation. The UK Authorities only support the inclusion of the facilitation of voluntary task delegation between supervisors in the Decisions, and not the delegation of responsibilities.
- Streamlining reporting requirements. The UK Authorities do not support any proposed change. They also argue that any change to the Decisions would need a direct mandate from the Council of the European Union.
- Colleges of supervisors. The UK Authorities support the establishment of Supervisory Colleges and have proposed that in Europe they are established in legislation. The UK Authorities see a role for the Level 3 Committees in providing guidance for Supervisory Colleges. However, such guidance will need to be non-prescriptive, recognising that arrangements for Supervisory Colleges will necessarily be bespoke. As a result, the UK Authorities do not see the Level 3 Committees providing an oversight role for the Supervisory Colleges.
- Development of a common supervisory culture. The UK Authorities support a role for the Level 3 Committees in developing a common, but not a single, supervisory culture.
- Cross-sectoral cooperation. The UK Authorities agree that some general wording supporting joint Level 3 work could be usefully included in the Decisions establishing the Level 3 Committees but do not believe that anything more than this is necessary.
- Financial stability. The UK Authorities support only a role for the Level 3 Committees in providing an early warning mechanism, for example on market trends.