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The European Banking Authority (EBA) said a suggestion by Brussels that it should be merged with the European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt is "unlikely to create significant synergies in the core business" of regulation and supervision.
The London-based EBA was responding to a public consultation by the European Commission on the future shape of financial supervision in the EU, made all the more pressing with the bloc's biggest financial market, Britain, leaving in 2019.
The Commission aired a "twin peaks" model of centralising capital requirements for banks and insurance at a merged EBA/EIOPA, with conduct overseen by the European Securities and Markets Authority (ESMA) in Paris.
EBA said there could be savings from a merger in areas where it is understaffed, such as in economic analysis and data mangement.
"However, no material benefit in terms of reduction of costs in corporate functions is envisaged, as resources in these areas are already very slim," EBA Chairman Andrea Enria said in a letter to the Commission.
EIOPA said in its response that changes to the supervisory set-up should be assessed "carefully to ensure the continuation of an effective holistic and integrated approach".
In its response to the consultation, ESMA said it wants a string of new powers, while EBA and EIOPA called for generally modest additions to their armory.