1. Current regulatory framework
Currently, three supervisory committees exist at the EU level in the financial services sector, one each for the banking, insurance and occupational pensions, and securities sectors.1 These are the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Committee (CEIOPS) and the Committee of European Securities Regulators (CESR). To date, their functions have remained consultative in nature.
2. Communication on new European financial supervisory framework
In its 27 May 2009 Communication,2 the European Commission outlined the structure it envisages for a new European financial supervisory framework. The Communication largely adopted the recommendations of the de Larosière report, which advocated the creation of a European System of Financial Supervisors (ESFS) whereby national authorities would collaborate with the aforementioned Committees, all three of which would be transformed into European Supervisory Authorities. The Authorities would have increased powers, including the coordination of the work of national supervisors, arbitration between national supervisors in cases of disagreement on the oversight of cross-border financial institutions, and the direct supervision of certain pan-European institutions which are regulated at EU level.3 This system is also intended to produce a single set of harmonised rules to govern the behaviour of financial institutions across all Member States. In parallel, the Communication envisages the creation of a European Systemic Risk Council (ESRC), which will have no formal legal status but will act as an early warning system for national authorities of any potential threats to financial stability at the macro level. In monitoring and assessing these systemic risks, the ESRC will issue non-binding recommendations for action where it deems necessary.
3. Proposal Tracker
At present, there is a public consultation on the plan until 15 July 2009.4 Formal legislative proposals are expected to follow after the summer.
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1. Finance ministries are also represented on so called 'Level 2' committees – the European Banking Committee (EBC), the European Insurance and Occupational Pensions Committee (EIOPC) and the European Securities Committee (ESC).
2. Accessible at http://ec.europa.eu/internal_market/finances/committees/index_en.htm#communication.
3. E.g. Credit rating agencies
4. Online consultation form: http://ec.europa.eu/internal_market/consultations/2009/fin_supervision_may_en.htm.