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Eugen Teodorovici, minister for finance of Romania, said: “The European supervisory authorities play an important role in contributing to the health of the EU's financial system. They ensure that our common rules are implemented coherently throughout the EU and that national supervisors cooperate as efficiently as possible. This file is a priority for our Presidency and we are now ready to begin negotiations with the Parliament and are committed to reaching an agreement as soon as possible.”
The European system of financial supervision was established in 2011 and consists of:
three European supervisory authorities (ESAs): the European banking authority (EBA), the European insurance and occupational pensions authority (EIOPA) and the European securities and markets authority (ESMA). They supervise and provide regulatory guidance for individual sectors and institutions.
the European systemic risk board (ESRB) which oversees the financial system as a whole and coordinates EU policies for financial stability.
In its mandate, the Council suggests to introduce improvements to the existing system for supervisory convergence in order to improve the efficiency, coherence and overall transparency of the process. The Council position introduces new tools, for example the elaboration of a strategic supervisory plan at EU level, while reinforcing existing mechanisms such as peer reviews or consultation of the stakeholders groups.
The general approach also reviews the existing governance structure. It maintains the principle that decisions have to be taken by the board of supervisors and ensures a key role for national competent authorities within the ESAs governance structure: no decision should be taken against the will of a majority of national supervisors, and the ultimate decision-making body of the Authority is the board of supervisors. In parallel, the Council recommends reinforcing the role and powers of a management board as the main body preparing the board of supervisors' meetings and decisions. It should be composed of a chairperson, six members of the board of supervisors and two full-time members, selected on the basis of their merit, managerial skills and experience of financial supervision. The chairperson and the fulltime members of the management board should be accountable to the European Parliament and to the Council.
As regards the authorities' funding scheme, the Council position generally preserves the existing system of contributions coming partly from the EU budget and partly from national competent authorities.
The reform also reviews the powers of each of the three ESAs. The Council recommends giving ESMA direct supervision powers over critical benchmarks as well as services offering consolidated trading data covering trade in equity and non-equity instruments in the EU, the so-called "consolidated tape providers". In addition, the Council proposes that information exchange and cooperation between national authorities be strengthened, and that the ESAs take better account of cross-border activities.
Finally, the reform aims at improving the functioning of the European Systemic Risk Board (ESRB) with target amendments. In its position, the Council seeks to clarify the role and competences of the ESRB in order to minimise potential risks of conflict of interests between the ECB's different responsibilities in the fields of monetary policy, micro-prudential supervision (as the SSM) and macro-prudential supervision (as the ESRB).