Brussels, 19/08/2014 (Agence Europe) - A report from the European Commission reveals that the three ESAs (European financial supervision authorities, viz. the European Banking Authority (EBA), the European Financial Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EBA)) are suffering from lack of resources.
“Funding and resources of the ESAs should be commensurate to their increasing tasks and responsibilities. There is broad consensus among stakeholders that the current allocation of funding (60% by NCA (national competent authority, Ed.), 40% by the EU, and fees raised by ESMA for the supervision of credit rating agencies and trade repositories) is unsatisfactory,” explains a report on the functioning of the European financial supervision system that was published by the European Commission at the beginning of August.
The Commission says that this “raises the question of the independence of the ESAs which could be at least perceived as being undermined by the role of NCAs and the Commission in financing them. Second, the current scheme, and the need to increase staffing, is not sustainable for many NCAs, in particular in the current strained economic environment. This risks leading to a situation were increasing funding at European level is financed at the expense of weaker funding for supervision at national level. Furthermore, resources at the EU level are tight.”
Different options for improving the resources situation, both in the short and in the long-term, have been brought forward by stakeholders, such as concerning the funding mix, introducing a separate budget line for the ESAs; and increasing the level of funding by raising fees and/or levies.
The Commission does not recommend a change to the rules, noting that the three ESAs operate satisfactorily although they could pay greater attention to the question of consumer and investor protection. In the medium-term, ESA governance could be re-examined in the light of rolling out the supervision and resolution arms of Banking Union. (MB)