European System of Financial Supervisors

The European System of Financial Supervisors (English European System of Financial Supervision, ESFS) is a system of the European Union authorities and committees on financial market supervision, which began its work on 1 January 2011. The most important part of the ESFS are three European Supervisory Authorities ( European Supervisory Authorities english, ESA) for banking, insurance and securities sector.

Background

Due to the negative experiences of the global financial crisis in 2007 and the Euro crisis from 2009 grew into the EU's efforts to stronger EU regulation of European financial markets. The United Kingdom and Germany were not initially willing to transfer powers of its financial supervisory authorities ( in Germany Bundesbank and BaFin ) on the European level. After months of blocking it articulated in September 2010, a compromise in negotiations with the European Parliament, which insisted on a central oversight with penetration rights. The compromise provides that the regulation of financial markets is largely decided at the European level, adhering to the standards, however, continue to be monitored primarily by the national supervisory authorities.

The ESFS was adopted by the European Parliament on 22 September 2010.

Composition of the ESFS

The ESFS is according to. Article 2, Paragraph 2 ESMA Regulation composed of:

• Three European Supervisory Authorities, created by transforming the existing supervisory committees (CEBS, CEIOPS, CESR) arise: European Banking Authority (English European Banking Authority, EBA ), headquartered in London. The central task of the EBA is the development of regulatory standards for European banks, but compliance is up to the national supervisory authorities of the Member States and may only in exceptional cases, such as a breach of European law, by the EBA will be prosecuted.
• European Supervisory Authority for Insurance and Occupational Pensions (English European Insurance and Occupational Pensions Authority, EIOPA ), headquartered in Frankfurt am Main.
• European Securities and Markets Authority ( European Securities and Markets Authority english, ESMA ), headquartered in Paris.

Tasks

Purpose of the three financial supervisory authorities is the development of uniform standards, guidelines and recommendations, and monitoring the application of EU law. Rights of intervention, the authorities only in exceptional cases, such as when a national supervisory authority against EU law.

Further development

In its further course, introduced in 2011 European System of Financial has proved to be insufficient to address the financial crisis in Europe. In particular, the experience of the sovereign debt crisis in Cyprus since 2011 have shown that national supervisors did not adequately respond to the crisis. On 12 September 2012, the European Commission presented a package of measures to create a single regulatory mechanism for banks under the leadership of the European Central Bank as a first step towards a European bank Union. In December 2012, the European finance ministers agreed on key points to create a single banking supervision mechanism ( English Single Supervisory Mechanism, SSM). On March 19, 2013, the Council of the European Union announced that the European Parliament reached an agreement on the establishment of a central European Banking Supervisors had been reached. Accordingly, the ECB should continue to monitor all banks in the euro zone, which accounts whose balance sheet total over 30 billion euros, or 20 percent of the economic output of a country. Thus only about 150 to 200 of the approximately 6,000 banks in the euro zone directly under the control of the ECB. The rest will continue to be monitored by the national supervisory authorities. In Germany in particular, the savings banks and therefore are exempt from the central control. As of March 2014, the ECB is to fulfill its new tasks.

Future delineation between EBA and ECB in banking supervision

The European Banking Authority (EBA ) will continue to develop uniform standards of supervision for the 28 Member States of the EU, primarily responsible for the supervision of credit institutions remain the national supervisory authorities. For the major banks in the 17 countries of the euro zone (ECB ) can be monitored directly in the future of the European Central Bank, the ECB takes the place of the previously competent national supervisory authorities.