European System of Financial Supervision

The European System of Financial Supervision (ESFS) is a network centred around:

• the three European Supervisory Authorities (ESAs):
  • the European Banking Authority,
  • the European Insurance and Occupational Pensions Authority,
  • the European Securities and Markets Authority;
• the European Systemic Risk Board — an independent EU body responsible for the macro-prudential supervision of the financial system within the EU, which brings together representatives of the EU Member States’ national central banks and the chairs of the three ESAs; and
• the national supervisory authorities of the Member States.

The ESFS’s main task is to ensure there is consistent and appropriate financial supervision throughout the EU to promote financial stability and to protect consumers of financial services products.

The ESFS includes authorities responsible for micro-prudential supervision (focused on the stability of individual financial institutions) and macro-prudential supervision (focused on the stability of the financial system as a whole).

The ESFS was set up in 2010 in response to the global financial crisis and came into operation in 2011. Its legal basis is Article 127(6) of the Treaty on the Functioning of the European Union, which allows the Council to confer specific tasks on the European Central Bank (ECB) concerning policies relating to the prudential supervision of credit institutions and certain other financial institutions.

As the European banking supervisor, the ECB works closely with the ESAs, and also provides the ESFS with a secretariat.

SEE ALSO

• European Central Bank
• European Supervisory Authorities (ESAS)
• European Systemic Risk Board (ESRB)
• European Banking Authority (EBA) (summary)
• European Insurance and Occupational Pensions Authority (EIOPA) (summary)
• European Securities and Markets Authority (ESMA) (summary)
• European Systemic Risk Board (summary)
• European System of Financial Supervision (website).