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New legislative proposals to strengthen financial supervision in Europe

Creation of a European Systemic Risk Board (ESRB) and pan-European supervision of individual institutions through a European System of Financial Supervisors (ESFS)

23/09/2009


The Commission's legislative proposals, adopted on 23 September 2009, establish the first EU wide system of supervision. Through the creation of a European Systemic Risk Board (ESRB) and through a European System of Financial Supervisors (ESFS), the Commission addresses the weaknesses and shortcomings of the current supervisory structure in Europe both at macro- and micro-prudential supervision levels.
>> Internal Market. Proposals to strengthen financial supervision

  • The mission of a European Systemic Risk Board (ESRB) is to monitor and assess risks to the stability of the financial system as a whole ("macro-prudential supervision"). The ESRB will have the capacity to address recommendations and warnings to Member States (including the national supervisors) and to the European Supervisory Authorities, which will have to comply or else explain why they do not intend to do so.

    The ESRB will be composed primarily of heads of the ECB, national central banks, European Supervisory Authorities and national supervisors.

  • The European System of Financial Supervisors (ESFS) ("micro-prudential supervision") will bring together national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.

    The new European Supervisory Authorities will be created by the transformation of existing level 3 Committees for the banking, securities, and insurance and occupational pensions sectors into a European Banking Authority (EBA), a European Insurance and Occupational Pensions Authority (EIOPA), and a European Securities and Markets Authority (ESMA).

>> Press release IP/09/1347 of 23 September. Commission adopts legislative proposals to strengthen financial supervision in Europe Choose translations of the previous link