The European Parliament's Committee on Economic and Monetary Affairs (ECON) sent a strong signal on Thursday 10 January by adopting by a very large majority its position on the far-reaching reform of the competences, governance and financing of the three European Supervisory Authorities (ESA, see EUROPE 11864).
Co-rapporteurs Pervenche Berès (S&D, France) and Othmar Karas (EPP, Austria) welcomed the fruitful cooperation between their two groups which led to the granting of a "strong" negotiating mandate approved by almost all MEPs.
The main proposal amending the founding regulations of the three ESAs was adopted by 37 votes in favour, 2 against and 3 abstentions, or 88%. The proposals amending the MiFIR Regulation, the MiFID Directive and the Solvency II Directive as well as the proposal on the European Systemic Risk Board (ESRB) both received more than 93% of the votes.
The vote took place without surprise and all the compromise amendments (see EUROPE 12168) were adopted. One point of disagreement remained open, namely the fact that the ESRB is chaired by the President of the European Banking Authority.
The provision, supported by the S&D and ALDE groups, was finally maintained, to the disappointment of the EPP and Greens/EFA groups, for whom this provision is a source of conflict of interest.
Contacted by EUROPE, Mrs Berès returned to the main improvements made by the Parliament to this reform. In terms of governance, it considered in particular that the new independent executive committee established within each ESA will considerably strengthen their capacity for action.
"The position of the European Parliament is a coherent one. We cannot both blame the supervisory authorities for not exercising their powers and realize that the governance of these authorities does not allow them, in the current situation, to exercise their powers", she told the parliamentary committee.
Mrs Berès also welcomed the introduction into the mandate of the three ESAs of the power to temporarily prohibit the marketing, distribution or sale of certain products or services likely to cause material harm to consumers.
Until now, this possibility has only been provided for under the MiFID II Directive and only applies to financial products, the French socialist explained.
These provisions were also welcomed by Finance Watch and Better Finance, whose several suggestions were taken up (see EUROPE 11913).
Another victory for Mr Berès is the introduction of a clear mandate for ESAs to monitor environmental, social and governance risks, with the Member making explicit reference to the Paris Climate Agreement.
The Parliament has also strengthened surveillance towards third countries, in particular with a view to Brexit. "This is necessary to make sure that the Brits, once they are out, do not start to do dodgy business in the EU with weakened rules", said Othmar Karas.
The ESAs will also be responsible for regularly monitoring the development of the regulatory framework in third countries benefiting from one or more equivalence decisions, and for forwarding a confidential report to the Council and the Commission, but also to Parliament.
European Parliament calls on Council to take responsibility
All eyes are now on the Council, which has not yet adopted its negotiating position on this far-reaching reform, but only on the part related to the European Banking Authority's new powers to combat money laundering (see EUROPE 12164).
"We know that for the Romanian Presidency of the Council it is a real challenge, because time is short [...], but we urge this Presidency to take its responsibilities", said Pervenche Berès.
According to her, all scenarios remain open. But one thing is certain: it will refuse to allow the Parliament to enter into negotiations with the Council only on the provisions concerning money laundering. Negotiating the two issues separately would be "shooting yourself in the foot", she said.
"If we want to be consistent in the fight against money laundering, then we need to strengthen the governance of supervisory authorities. Otherwise, we would put a ‘varnish’ on a situation without profoundly changing it", she explained. (Original version in French by Marion Fontana)