The presidents of the three European Financial Supervisory Authorities (ESAs) presented their priorities to the European Parliament's Committee on Economic and Monetary Affairs (ECON) in turn on Monday 4 November. For the President of the European Banking Authority (EBA), José Manuel Campa, the exercise was particularly dangerous and focused on the European authority's decision to authorise the departure of its Executive Director, Adam Farkas (see EUROPE 12329/18).
The case of Mr Farkas, who will become, at the beginning of 2020, Director General of the Association for Financial Markets in Europe (AFME), one of the main lobbies of the financial sector (see EUROPE 12329/18), has indeed provoked strong indignation in the European Parliament. At the end of October, MEPs also asked the Commission whether it intended to block this decision (see EUROPE 12356/9).
Asked about this by Luis Garicano (Renew Europe, Spain), Mr Campa acknowledged that it was an “obvious conflict of interest case”, which was taken into account from the beginning. Nevertheless, he recalled all the restrictions decided by the EBA. In particular, Mr Farkas should not personally lobby the EBA for 2 years after his departure. For 18 months, he will not be able to advise either the AFME or its members on matters directly related to work he has carried out within the EBA over the past 3 years.
He indicated to José Gusmão (GUE/NGL, Portugal), for whom compliance with certain restrictions will be impossible to verify, that the EBA had issued a note to all its employees asking them to report it immediately, if Mr Farkas contacts them during the period for which these restrictions apply. In his view, the fact that the EBA’s decision has been made public will strengthen compliance with the measures taken.
Mr Campa also had to explain why the authority he heads did not prohibit Mr Farkas' departure. He indicated, in response to MEP Paul Tang (S&D, Netherlands), that the EBA had received legal advice that a ban would be tantamount to preventing Mr Farkas from “earning a living without offering him any other alternative”. For this reason, he added, “more proportionate” measures have been taken, namely to limit the content of the activities he will be able to carry out in his new job.
Money laundering. MEPs also asked Mr Campa about the fight against money laundering at European level.
The reform of the financial supervision architecture (see EUROPE 11864/1) “gives the EBA some limited new powers and tasks allowing us to lead policy development, coordinate and monitor the efforts of national supervisors to strengthen AML/CFT practices across the Single Market”, he said.
Asked by Luis Garicano about the idea of creating an EU body responsible for combating money laundering (EUROPE 12358/5), he acknowledged that, in view of the differentiated application of European rules in the Member States, “something should be done”.
Nevertheless, to strengthen the fight against money laundering, several options are available, with Mr Campa advocating future legislation through directly applicable regulations rather than directives to be transposed into national law.
Cryptocurrencies. Mr Campa also identified stable cryptocurrencies as a challenge that the EU will increasingly face.
In this respect, he recalled the conclusions of the January EBA and ESMA opinions that cryptocurrencies are generally outside the scope of European banking, payment and electronic money legislation. Such a situation creates risks for consumers of money laundering or of a level playing field between Member States (see EUROPE 12168/9).
Asked by Stefan Berger (EPP, Germany) about the state of preparedness of the European authorities for stable cryptocurrencies, such as Facebook’s Libra, the EBA President said that the EU should analyse whether it had adequate regulation in this area. (Original version in French by Marion Fontana)