FINANCIAL SUPERVISION

FINANCIAL SUPERVISION

HISTORY 

Financial Services Action Plan (1999)  

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Internal Market Financial Services. 43 regulations.

García-Margallo Report EP (2000) 

3 targets

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Divorce

Integration Supervision Harmonization

Speed Intensity

Pan European Institutions National Supervisors

CRISIS

Following Reports: Van den Burg on prudential supervision, Van den Burg on financial services policy, Van den Burg & Daianu recommendations to the Commission on Lamfalussy follow-up… Crisis: Larosière Report and Turner Review. Commission: Driving European Recovery (4/04/2009), European Financial Supervision (27/05/2009). European Council (12/2009): Single Rule Book. Individual Decision. Safeguards. European Parliament: Coordinators Declaration (2010).

INTERNATIONAL DOCUMENTS 

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“A Fair and Substancial Contribution by the Financial Sector” (IMF 4/16/2010): Financial Supervision Commission. USA – Obama. Europe 2020 A European strategy for smart, sustainable and inclusive growth (3/03/2010): crisis management and responsibility of the financial sector. European Council (25-26/03/2010): Systemic Institutions.

EUROPEAN SYSTEM (Art. 1a) 

Composition of the European System for Financial Supervision:     

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National Authorities. Systemic Risk Board. 3 European Authorities: Banking, Insurance and Occupational Pensions and Securities and Markets Joint Committee. Commission.

Strong idea: reinforce the idea of a system. ONE SUPERVISOR National Authorities accountable to the European Parliament.

RISKY TRANSACTIONS (Art. 6.2(fb))  

Temporary prohibition. Decision reviewed.

EUROPEAN SINGLE RULEBOOK (Art. 7-8) 

Regulatory Standards   

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EBA strong and responsible to the EP. Open consultation. Impact study. The Commission has limited power to modify proposals. Disagreement between EBA and Commission: control by the EP and the Council.

Implementing acts (Art. 291 TFEU). Orientations and recommendations (ex. Bonus): accountability.

INDIVIDUAL DECISIONS (Art. 9-10-11) 

When?:   

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To whom?:  

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non-fulfillment of European Law; emergency situations; disagreements within Colleges of Supervisor. National Supervisor. Financial Institutions.

Review: Board of Appeal (legality). Appeal to the Council: Safeguard Clause.

SUPERVISION OF CROSSBORDER INSTITUTIONS (Art. 12-12a,b,c,d) 

Theoretical approach (Turner Review): 

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Current mechanisms do not work. Only two solutions: more protectionism or more Europe.

National Solution: more power for the supervisor of the hosting country = market blow up. European Solution: 

EBA leadership in the Colleges of Supervisors:  

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Regulatory and implementing standards. binding mediation.

Reinforced supervision of Institutions that may pose a systemic risk (yellow alarm). Banking Resolution Unit (red alarm). European Funds:  

European Deposit Guarantee Skims. European Stability Fund.

INTERNATIONAL RELATIONS (Art. 18)  

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Europe single voice. Supervisor arrangament with third countries authorities. Administrative arrangaments and equivalent decisions.

STAKEHOLDER GROUP: SME (Art. 22)

SAFEGUARDS (Art. 23)   

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Direct and significant impact. Impact study. Ratification of the Authority's decision: by simple majority. Revocation of the Authority's decision: by qualified majority.

JOINT COMMITTEE (Art. 40-43)

REVISION CLAUSE (Art. 66)  

Proposals to implement Art. 12: 6 months. Proposals to evaluate experience acquared: 

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Conversion in supervisory standards practices reached by National Authorities; the functioning of the Colleges of Supervisors; the role of the Authority on the supervision of Systemic Institutions; the application of the Safeguard Clause established in Art. 23.