The Council endorsed an agreement with the European Parliament on a reform of the EU framework for financial supervision.
The reform will establish a new basis for supervision in Europe, eliminating deficiencies that were exposed during the financial crisis. It involves the creation both of a European Systemic Risk Board (ESRB), which will provide macro-prudential oversight of the financial system, and three European authorities for the supervision of the banking, insurance and securities industries.
The Council also endorsed changes to the manner in which the EU's stability and growth pact is implemented in order to allow a "European semester" to be introduced as part of a reform of EU provisions on economic policy coordination.
This initiative will allow the economic and budgetary policies of the Member States to be monitored in parallel during a six-month period every year, starting in 2011, so as to detect any inconsistencies and emerging imbalances.
The so-called European semester is one of the first initiatives to emerge from a task force on economic governance set up at the request of the European Council and chaired by its president, Herman Van Rompuy.
The Council held an exchange of views on the options regarding financial industry contributions in the wake of the financial crisis. Discussions covered the coordination of levies on banks and other financial institutions and the possible introduction of a financial transaction tax.
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