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In response to the financial crises the CEPS report calls for an integrated financial oversight with EU supervisors working under a single umbrella, a single institutional structure, on the basis of harmonised principles and statutes, but with full application of the subsidiarity principle.
The report recommends:
(1) The European Council should formally mandate the High-Level Expert Group on EU financial supervision to analyse the optimal structure of financial oversight and propose concrete steps leading to a European System of Financial Supervisors;
(2) A European Financial Institute should be created to lay the groundwork for the establishment of the European System of Financial Supervisors; and
(3) The European System of Financial Supervisors should be given definitive target date to commence operations.
The European System of Financial Supervisors (ESFS) would be based on the subsidiarity principle. Issues to be centralized at the European level include crisis management, data-sharing and macro-prudential oversight, pooling of expertise in the supervision of large systemically important financial institutions, mediation amongst supervisors and supervisory decision-making.
The conduct of business control would largely remain at national level. A European Resolution Trust managed by the European Investment Bank should deal with problem banks.
The report is attached below