ESBG is largely in favour of maintaining the status quo: include some adaptations in order to cater to recent developments such as the establishment of the Single Supervisory Mechanism. Bear in mind that numerous aspects cannot be properly evaluated at this point in time owing to the comparative youth of the European System of Financial Supervision.
Updated: July 2018
The European Commission should keep in place the financing structure of the European Supervisory Authorities, and focus on the efficiency of level 2 instruments delivered by the ESAs, which should all be consulted, respectful of the mandate given at level 1 and issued timely in order to allow for implementation in a realistic timeframe.
ESBG opposes strongly any attempts to change the funding structure because ESAs form a necessary public good involved in oversight by public authorities. EU budget funds should continue to buttress the agencies that fall under the responsibility of EU institutions. The banking industry already contributes heavily to regulation and supervision and additional EU contributions would further raise what the already disproportionate impact on savings and retail banks.
The ESAs are performing tasks that should be performed by the Commission pursuant to Articles 290 and 291 of the Treaty on the Functioning of the European Union, hence the need for a hefty part of ESAs costs to be covered by the Commission or EU budget.
ESBG sees it vital that ESAs consult on all texts which are issued – whether they are technical standards, guidelines, recommendations or Q&As. Some texts may not be binding at EU level, but could be taken up by NCAs or become de facto binding due to the 'comply or explain' procedure.
EU institutions should also spend more time on figuring out the details in level 1 texts rather than leaving it all to the ESAs – which would allow the ESAs to better allocate their time and resources at level 2. Relatedly, ESBG calls on the European Commission to ensure that the ESAs do not overstep their mandate, in particular their work on non-core activities and own-initiative work, which would help them to follow the principle of prioritisation.
The ESAs should reduce the time taken to respond to Q&As, which would reduce uncertainty and give more time for banks to implement the requirements before deadline.
On reporting requirements, ESBG members call for more cooperation between the ESAs, national competent authorities (NCAs) and the Single Resolution Board in order to streamline the requirements and thus reduce the constraints on market participants. ESBG argues that if the ESAs were to use data collected by NCAs via a comprehensive network of data hubs, then there would be no need to approach institutions for additional data sets and institutions would need to report data only once. It provides three ways to improve reporting requirements in its response.
The European System of Financial Supervision (ESFS) was created as response to the financial crisis and became operational in 2011. This new institutional architecture, consisting of the three European Supervisory Authorities (ESAs) - the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) - the European Systemic Risk Board (ESRB) and the Member States' national supervisory authorities, is currently in the process of being reviewed, as mandated in the founding regulations. The structure and performance of the ESAs and the ESRB within the system are being examined, as well as the system as a whole, with a view to improving the effectiveness and efficiency.
ESBG follows the joint work being carried out by the ESAs and responds to public consultations on the topics which are of interest to our members. In addition, ESBG regularly meets with the European Banking Authority (EBA) and European Securities Markets Authority (ESMA) and responds to their public consultations.
On 21 March 2017, the European Commission launched a public consultation on the way forward for the three European Supervisory Authorities (EBA, ESMA and EIOPA). This was followed up by three legislative proposals by the Commission updating the ESAs regulations in autumn 2017.