Brussels, 03/01/2011 (Agence Europe) - Learning from the financial crisis and gaps that emerged during it in terms of risk prevention and coordinating the work of national supervisory authorities, the European Union has set up a new financial industry surveillance and supervision system, which came on stream on 1 January 2011.
A few days after the setting up of the European Systemic Risk Board (ESRB) in December, which is a new independent body based in Frankfurt, Germany, that will monitor the financial system as a whole and identify potential problems that might generate future financial crises, there are now three new EU financial supervisory authorities in operation.
There is a new EU supervisory authority for banking, one for markets and one for insurance and occupational pensions funds, which will work with national authorities that will continue to monitor daily business. The ESRB “will work in close cooperation with the new European Supervisory Authorities. These will not replace national authorities and our objective is not to transfer the control of financial institutions to the EU. Our aim is to create a network of authorities, where the national authorities are responsible for the daily surveillance, and the European authorities - using the expertise of the national authorities and working hand in hand with them - are responsible for coordination, monitoring and if need be arbitration between national authorities, and will contribute to the harmonisation of technical rules applicable to financial institutions”, explained EU Commissioner Michel Barnier.
He continued: “With this new framework of financial supervision in Europe in place, we are putting into effect in practical terms the lessons learnt from the crisis. This framework is at the heart of the ongoing financial reforms. It is the foundation on which all other reforms are based - for example those for credit rating agencies, hedge funds, derivatives, stress tests etc. Together, these measures will enhance consumer protection. And they will contribute to ensuring the taxpayer is not again the first in line to bear the costs of a crisis.”
The chair of the EPP Group, Joseph Daul, made similar comments, suggesting that the new European authorities should ensure better regulation of the financial markets and prevent the repetition of another huge financial crisis as occurred in the autumn of 2008. (F.G./transl.fl)