On 8 August 2014, The European Commission adopted the review reports on the European System of Financial Supervision (ESFS), consisting of a report on the operation of the European Supervisory Authorities (ESA) and a report on the mission and organisation of the European Systemic Risk Board (ESRB).
The review was carried out under Article 81 of the ESAs' founding Regulations, which requires the Commission to carry out a first review of the functioning of the ESAs in 2014 and every three years thereafter.
The main findings of the review of the ESAs were:
- The ESAs have overall performed well during the first three years of operations and have successfully built functioning organisations, started delivering on their mandates and developed their own profiles;
- However, the ESAs should give a higher profile to issues related to consumer/investor protection by making better use of peer reviews;
- For the longer term there may be a need for changes to the legislative framework for the ESAs. These would include changes to the governance of the ESA to improve the capacity of the Board of Supervisors to take decisions in the interest of the EU as a whole, and changes to the existing funding arrangements so that the ESAs could fulfil their broad range of tasks.
The main findings of the review of the ESRB were:
- The ESRB was a crucial driver behind introducing a macro-prudential dimension of financial policies;
- Certain improvements to the ESRB framework could enhance the efficiency of macro-prudential oversight at EU level. Some of these improvements would not require legislative action, such as a more proactive communication strategy and further expansion of the ESRB's focus beyond banking risks; and
- Some improvement may require changes to the ESRB's Founding Regulations, particularly in relation to the ESRB's organisational identity, its internal governance, and the expansion of its toolbox so that it exercises more soft power to enhance flexibility and foster early intervention.
The report will be forwarded to the European Parliament and to the Council for their consideration.