Brussels, 12/11/2014 (Agence Europe) - The members states take the view that the European financial supervision system is working properly and that there is no need for an in-depth revision at this stage.
However, the system - which is made up of the European Systemic Risk Board (ESRB) and the European supervisory authorities for banking (EBA), the financial markets (ESMA) and the insurance sector (EIOPA) - could benefit from “targeted” improvement aimed at improving “the governance and financing” of the three European authorities, whilst the role of the ESRB could change within the field of micro-prudential supervision to take account of the emergence of “new players”, the Ecofin Council states in conclusions it adopted on Friday 7 November. Any in-depth reform would have to take account of the experience accumulated in the implementation of banking union within the Eurozone.
The question of funding raises problems. In late August, the European Commission noted a shortfall of financial resources for the three European supervisory authorities (ESA). These are 60% funded by the competent national authorities, with 40% coming from the EU budget. The ESRB receives fees as direct supervisor of the ratings agencies (EUROPE 11135).
In a letter to the Council, the presidents of the three European financial supervision authorities expressed their “concerns” regarding the inter-institutional negotiations on the 2015 budget of the EU. They criticised the attitude of the member states, which supported the Commission and considerably adjusted their budget requests “downwards”. “The budget cut and the freezing of the staff numbers, as proposed by the European Commission and supported by the Council (…), would severely undermine our capacity to continue to deliver on the objectives set out in the ESAs' regulations”, they state. They flag up the urgent need for a “robust, long-term solution” in the form of funding through a specific line in the EU budget, from the industry, or a combination of the two options.
In its conclusions, the Council goes no further than to acknowledge the fact that the question of the funding of the three European authorities requires a reflection on various funding models consistent with the principles of the fair share of the burden and budgetary discipline and ensuring a reconciliation of responsibilities, resources and tasks. (MB)