The European system of financial supervision
The European system of financial supervision (ESFS) was introduced in 2010. It consists of:
- the European Systemic Risk Board (ESRB)
- 3 European supervisory authorities (ESAs), namely:
- the European Banking Authority (EBA)
- the European Securities and Markets Authority (ESMA)
- the European Insurance and Occupational Pensions Authority (EIOPA)
Both the ESRB and the 3 ESAs started their operation in January 2011, following the adoption of a package of legislative acts. These comprise
- Regulation (EU) No 1092/2010 establishing the ESRB
- Regulation (EU) No 1096/2010 conferring specific tasks upon the European Central Bank concerning the functioning of the ESRB
- Regulation (EU) No 1093/2010 establishing the EBA
- Regulation (EU) No 1094/2010 establishing the EIOPA
- Regulation (EU) No 1095/2010 establishing the ESMA
- 'Omnibus' Directive 2010/78/EU amending existing financial services legislation to ensure that the new authorities can work effectively
In 2011 the EU adopted a further Omnibus II directive to clarify the powers of the new authorities, particularly in the insurance sector.
The adoption of these laws followed the proposals of a Commission communication on financial supervision and the recommendations of the de Larosière expert group. This group was mandated by the Commission to give advice on how to strengthen European supervisory arrangements in light of the failures of financial supervision exposed by the financial crisis. The de Larosière group issued its report in February 2009.
Review of the ESFS
The regulations establishing the ESRB and the ESAs include provisions for the Commission to publish a general report on the operation of the new authorities and the ESFS as a whole, and a review of the mission and organisation of the ESRB. The Commission issued these reports in August 2014.
Building on these reports and taking into account the results of public consultations launched in 2013, 2016 and 2017, the Commission adopted a package of proposals to strengthen the ESFS in September 2017. The proposals aim to improve the mandates, governance and funding of the 3 ESAs and the functioning of the ESRB. This will ensure stronger and more integrated financial supervision across the EU.
- Communication from the Commission: Reinforcing integrated supervision to strengthen capital markets union and financial integration in a changing environment
- Proposal for a regulation amending regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010 establishing the ESAs; regulation (EU) No 345/2013 on European venture capital funds; regulation (EU) No 346/2013 on European social entrepreneurship funds; regulation (EU) No 600/2014 on markets in financial instruments; regulation (EU) 2015/760 on European long-term investment funds; regulation (EU) 2016/1011 on financial benchmarks; and regulation (EU) 2017/1129 on securities prospectuses
- Proposal for a regulation amending regulation (EU) No 1092/2010 establishing the ESRB
- Proposal for a directive amending directives 2014/65/EU (MiFID II) and 2009/138/EC (Solvency II)
- Amendment of pending proposal from the Commission of 13 June 2017 amending regulations (EU) No 1095/2010 and (EU) No 648/2012 (EMIR II proposal)