Eight years after the 'de Larosière' report (see EUROPE 9848) suggesting a new institutional architecture for financial supervision, the former governor of the Banque de France, Jacques de Larosière, proposed a few areas for reflection to improve the functioning of the three European supervisory authorities (ESAs), before the committee on economic and financial affairs (ECON) of the European Parliament on Wednesday 3 May.
De Larosière states that although the three European authorities responsible for supervising the financial markets (ESMA) and banking (EBA) and insurance (EIOPA) sectors have fulfilled their missions and helped to secure a “single rule-book” for financial activities, Brexit provides an “opportunity to review how they operate”. “The EU27 will need resources to defend the financial integrity of the EU”, he stressed.
To achieve this, he first proposed a revision of the management body structures, converting them into governing councils made up of permanent, independent members not from the national authorities. He stressed that the current composition of the ESA boards favours “inertia” and revising the structure would secure a “more efficient and more European mechanism”.
As well as their structures, the ESAs' powers should also be bolstered, to promote convergence within the Economic and Monetary Union, the former IMF Director General explained. He suggested extending the role and mandate of the chair of each authority (see EUROPE 11722), widening their powers to impose sanctions and allowing them to establish direct dialogue with the banks they supervise.
However, he had one warning: purely institutional changes will not suffice. “If the trust is not there, there is not a certain convergence between the economic policies and actions undertaken in the field of the economy, changing the institutions will not allow us to move forwards”, he concluded.
The effectiveness and efficiency of the ESAs is currently the subject of a public consultation launched on 21 March 2017. This will feed into the Commission's reflection in preparation for a forthcoming legislative initiative. (Original version in French by Marion Fontana)