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ABBL thinks that strong and concrete measures in the field of Prudential supervision and of financial stability are necessary in order to restore confidence in the global financial system. In that respect, ABB has supported since its inception the reform of the supervisory architecture proposed in the de Larosière report and endorsed by the European Commission.
ABBL’s comments focus on the Commission proposal for a regulation establishing a European Banking Authority (the EBA). They also apply to the proposals establishing other Authorities, namely, the ESMA and the EIOPA.
These are some of ABBL’s comments:
· Establishing the EBA should not cause an imbalance in the current institutional structure. More specifically, the Level 2 of the Lamfalussy Approach has proven to be successful, and it should remain a prerogative of the Member States with the involvement of the European Parliament.
· Article 7 of the Regulation states that “the Authority shall, where appropriate, conduct open public consultations on technical standards and analyse the potential related costs and benefits”. Article 8 does not mention any kind of consultation prior to the issuance of the guidelines and recommendations. ABBL thinks that the open public consultation, coupled with a cost/benefits analysis, should be systematic in order to make the process transparent and efficient.
· Article 10.1 states that the existence of an emergency situation may be decided by “the Commission, upon its own initiative or following a request by the Authority, the Council, or the ESRB”. In ABBL’s view, the Commission should not be involved in such a decision. Given that emergency situations may imply the direct intervention of Member States to restore confidence, it thinks that the Council, in close coordination with the ESRB, is best placed to determine the existence of an emergency situation
· Article 11.1 defines the scope of the procedure for settling the disagreements in “areas where the legislation referred to in article 1(2) requires cooperation, coordination or joint decision making by competent authorities from more than one
· ABBL is concerned by the Commission proposal that the Board of Supervisors should decide by Qualified Majority Voting (QMV). The QMV is a system that encourages influence from alliances that may pollute, through exogenous elements, technical decisions on the banks’ solvency or Liquidity position, for example. The QMV system is likely to result in conflicts between European supervisors. ABBL proposes that the Authorities adopt the “one member, one vote” system as a fundamental principle in their decision-making mechanism and apply it to all decisions.
· ABBL does not support the presence of a Commission representative on the Management Board, since it believes this would jeopardize the independence of the operational body.