ESRB dossier rapporteur and French Liberal MEP Sylvie Goulard is proposing, among other things, to regroup all the European supervisory authorities together in Frankfurt.
The severity of the financial, economic and social crisis which has swept across the EU clearly illustrates the insufficiency of current systems. Do we really need more than this crisis the most severe the world has known since 1929 - to finally endow the EU with effective financial supervision?
The European Parliament is aware of its responsibilities. Europe's citizens are awaiting firm measures for unemployment has risen dramatically. An increasing number of companies, particularly small and medium-sized ones, are failing. Public deficits and public debt have increased in a worrying fashion. Certain bank rescues will weigh heavily on taxpayers.
In a report published on 25 February 2009, the working group mandated by the Commission, presided by Jacques de Larosière, called for the creation of a new body responsible for macro-economic supervision, placed under the auspices of the European Central Bank (ECB), as well as three micro-economic supervision authorities endowed with binding powers. The Commission and the European Council have endorsed the general direction of the report. Hence the European Parliament and Council regulation proposal concerning macro prudential supervision of the financial system establishing a European Systemic Risk Board (ESRB) which is now submitted for examination by the European Parliament.
ESRB draft report by Sylvie Goulard (FR/ALDE) proposed, inter alia, the following changes:
· Taking inspiration from the success of the European System of Central Banks or the European Competition Network, your rapporteur proposes including the ESRB in the ESFS. This is required to ensure both the internal unity and the external coherence of financial supervision.
· An explicit loyalty obligation is to be established between the different members of the network to ensure a complete exchange of information.
· With a view to creating a common supervisory culture, she suggests regrouping all the European supervisory authorities (the ESRB and the three authorities) together in one place, in Frankfurt. This geographical proximity allows easy daily meetings which are not onerous, a single personnel recruitment system and, in the case of a crisis, faster reactions.
· European efficiency must take precedence over all other considerations and the future must remain open; the fact that the Lamfalussy Committees are broken up between multiple capitals must not prevent reflection about a tighter European structure which the EU needs.
· The de Larosière report suggests assessing in three years time if we should not be "moving towards a system which would rely on only two authorities", the first one responsible for issues of prudential supervision (banks and insurance), the second one in charge of "conduct of business and market issues". Between now and then the ESRB will be an active participant in the Joint Committee of the three European supervisory authorities.
(Further analysis to follow)
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