13 December 2013

ESBG's position on the Review of the European System of Financial Supervision and feedback already received

Compared to some of the rather bold, almost revolutionary ideas already proposed, the approach promoted by the ESBG is rather moderate and largely in favour of maintaining the status quo.

In order to take external feedback into account for the reviews of the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB), the Commission launched a consultation in April 2013. Stakeholders, European and national institutions representatives and other interested parties came up with the wildest ideas: merging all ESAs into a single entity; following the UK’s “twin peaks” system model; establishing new European institutions; enlarging the ESAs’ powers and competences, and significantly increasing their staff and resources.

Compared to some of these rather bold, almost revolutionary ideas, the approach promoted by the ESBG is rather moderate and 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 (SSM), and
• bear in mind that numerous aspects cannot be properly evaluated at this point in time owing to the comparative youth of the ESFS.

The EBA and the Single Supervisory Mechanism

Owing to the establishment of the Single Supervisory Mechanism (SSM), the interactions and synergies between the EBA and the ECB will need to be clarified (e.g. the EBA’s Single Rule Book and Single Handbook vs the ECB’s Supervisory Handbook, simultaneous stress-testing by the ECB and the EBA). Moreover, cooperation between the EBA and the ECB will also be paramount with regards to issues raised within banking groups that have entities both in participating and non-participating Member States in the SSM.

Any double standards, double reporting, or double stress-testing should be avoided; any inconsistencies should also be eradicated in order to ensure that the efforts made by the institutions finally result in restoring confidence; the data held should be shared between authorities in order to save time and improve efficiency, which is in the end beneficial to all stakeholders.

Full response

© ESBG