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As one of three European supervisory authorities, ESMA is responsible for writing many of the detailed rules required by incoming regulations and directives. However, it also has some direct supervisory powers, for example over credit rating agencies. The CNB says attempts are being made to expand this element of the authority's role.
In particular, the CNB opposes ESMA being granted direct supervisory powers over financial institutions. "The national supervisor is to remain responsible for day-to-day supervision of financial institutions and we do not see any reason why direct supervisory powers should gradually or radically be given to ESMA. The CNB does not support persistent efforts to separate national powers from national responsibilities. This is being tested routinely in new draft legislation that will be to the detriment of the European Union market and its competitiveness", says a spokesperson.
The two countries pushing against ESMA most prominently are the UK and Germany, according to the head of public affairs at one international company. Neither country wants to allow a European entity to have the final word on CCP authorisation to clear OTC products, he says. "The [UK] government has made it clear it does not support the transfer of supervision from the national to the European Union level", says a spokesman for the UK Treasury.
Others are more supportive of a powerful role for ESMA. "If we want this European single market to really compete with the likes of China, India and the US in future, there has to be more harmonisation, more of a single market than exists today", says Andre Camilleri, director general at the Malta Financial Services Authority.
Graham Bishop, an adviser on European financial affairs, believes ESMA is likely to obtain greater supervisory powers over the coming years. "As we get more, large pan-European firms, whether they are insurers, banks or securities firms, they will need a degree of pan-European hands-on oversight and that is exactly where the European regulator will come in. It might in the fullness of time be the actual supervisor for European banks in the same way it is doing for the credit rating agencies", says Bishop.
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