Brussels, 18/11/2010 (Agence Europe) - On Wednesday 17 November, the ECOFIN Council formally concluded the legislative procedure for introducing changes to the European financial supervision system (see EUROPE 10219 and 10220). The ministers unanimously agreed on a range of new financial supervision legislation, explained the Belgian finance minister Didier Reynders, saying that it would be possible to bring the new law into force on 1 January 2011, setting up the three ESAs (European Supervision Authorities) for banking, insurance and financial services and also the European Systemic Risk Board (ESRB).
Quizzed about the impact of the EU budget impasse on the new financial set-up, Reynders said that the best solution would be to have an EU budget. A special meeting of the ECOFIN Council on Thursday 16 December would, he said, be an important moment for reaching agreement on a new draft EU budget for 2011 that is being worked on by the European Commission (see EUROPE 10257).
Asked whether the EU's budget travails should be seen as an attempt by certain member states to delay the introduction of new EU financial supervision authorities, a European diplomat commented that what was at stake in the EU's budget for 2011 was far more important than setting up the financial bodies and anyway, 60% of the budget of the new bodies comes from the member states and only 40% from the EU budget. According to European Commission projections, the three ESAs should employ a total of around 300 by 2014. By comparison, despite the difference in powers, the UK's Financial Services Authority (FSA) employs 3,300. The European Commission's budget forecasts for 2011 for the ESAs is 53 members of staff and a budget of €12.68 million for the European Banking Authority (EBA); 53 members of staff and a budget of €10.66 million for the European Insurance and Occupational Pensions Authority (EIOPA); and 75 members of staff and a budget of €16.96 million for the European Securities Market Authority (ESMA). Among the 75 staff forecast for the ESMA are 12 people requested by the European Commission to enable the ESMA to supervise financial ratings agencies (at a cost of €2.5 million).
The applications period for the chairpersons and management of the ESAs is not closed and the Commission will draw up a shortlist of 3 to 5 names from the 300 applications received. Before taking up office in the spring of 2011, the chairpeople will have to attend a hearing at the European Parliament. (M.B./transl.fl)