28.12.2010   

EN

Official Journal of the European Union

C 354/85

1.1

The EESC considers that the crisis provides an urgent opportunity to put into effect a major reform of the supervisory system. The objectives of such a reform must be to prevent both isolated incidents and wider-ranging crises, and to strengthen resistance to such shocks. Its bases should be defined at Community level, and even by an interaction between a Community scheme and its equivalents in other countries.

1.2

The EESC deplores the fact that because the conditions governing market access and prudential requirements have not been properly harmonised, cases of regulatory arbitrage may result that lead to distortions of competition. Aligning such requirements on the basis of robustness, controlling the risks taken by financial actors and providing quality information for the public is essential to the founding of a community of interests within the European Economic Area. This movement must be accompanied by constant supervision of controllers' qualifications on the basis, in particular, of mutual collaboration.

1.3

For these reasons the EESC supports the Commission in its work designed to provide supervisory authorities in the sector with powers enabling them to define common technical standards and resolve differences between national authorities. It approves of the way in which relations between supervisory authorities are moving towards a consensual method of resolving any differences regarding practices in areas where provision has been made for joint decision-making processes. Like the Commission, it feels that a clear distinction should be made between, on the one hand, those issues which are technical and, on the other, those which are political and a matter for Community institutions that have a political mandate.

1.4

The EESC calls on the Commission to be ambitious when undertaking the work in its programme to put the finishing touches to the changes that are underway and when considering the technical standards to be applied in the securities sector and the expected directives on insurance and occupational pensions.

2.1

On 26 October 2009, the European Commission presented a first proposal for an omnibus directive aimed at amending a series of directives dealing with activities in the financial services sector. These directives covered own funds requirements, financial conglomerates, occupational pensions, market abuses, markets in financial instruments, prospectuses, the definitive nature of settlement, transparency, money laundering and investment funds.

2.2

The Commission’s aims are to protect the public, achieve financial stability and improve the single market, something which national supervisory schemes cannot achieve even if they are partially harmonised.

2.3

To achieve these objectives, the scope of the powers provided for in the regulations has to be defined in order to set up the authorities resulting from the transformation of existing European supervisory committees. The amending proposal for a directive will enable the existing texts to be changed so that the required uniformity can be achieved.

2.4

This proposal is fully consistent with the policy developed by the Commission following analysis of the conclusions of the report of the group of high-level experts chaired by Mr Jacques de Larosière aimed at establishing a more efficient, integrated and sustainable European system of supervision. According to the Commission communication of May 2009, this system should consist of a European Systemic Risk Board (ESRB), responsible for macro-economic supervision and for monitoring risks affecting financial stability, and a European System of Financial Supervisors (ESFS) consisting of a network of national financial supervisors working in tandem with new European supervisory authorities.

2.5

These authorities should be drawn from three supervisory committees occupying ‘level 3’ in the architecture resulting from the decision-making process bearing the name of Professor Lamfalussy and responsible for (i) banking activities, (ii) insurance and occupational pensions and (iii) financial markets.

2.6

In order to equip Europe with a more harmonised set of financial rules, the Commission communication of May 2009 entitled ‘European financial supervision’ (1) aimed at enabling authorities to develop draft technical standards and to facilitate the sharing of micro-prudential information.

2.7

The current proposal follows up the communication in three main areas: it defines the scope of standards which are genuinely technical (tools, methods, statistics, forms, …) and aimed at ensuring a convergence of supervision towards greater uniformity, which are to be subsequently adopted by the Commission.

2.8

It enables the authorities to settle disagreements between national authorities involving situations where cooperation is required in a spirit where the national interest is tempered by the common interest and where conciliation precedes any binding decision.

2.9

Finally, it sets up channels for sharing information required to arrive at a common doctrine without legal obstacles, particularly in relations between national authorities and the new European authorities.

2.10

These new European authorities would be empowered to have dealings with their counterparts in non-EU countries, to publish opinions on such matters as the prudential aspects of cross-border mergers and acquisitions and to draw up Community lists of approved financial actors.

3.1

The EESC’s current opinion follows the line taken in the opinions adopted following the financial crisis of, particularly the opinion on the report of the Larosière group (2) and on macro- and micro-prudential supervision. Although the immediate main causes of this crisis may be attributed to weaknesses in the US financial system, it has also shown up both shortcomings in European supervisory systems and major differences between them. The EESC regrets that neither crises nor previous incidents such as the Equitable Life case have led to the necessary reforms being undertaken.

3.2

The problems experienced by the customers of institutions that have developed cross-border activities are such as to undermine the confidence of consumers in the single market.

3.3

The new authorities should be equipped with structures for consulting the occupational interests concerned, the trade unions, the consumers of financial services and for maintaining a dialogue with the EESC as the representative of civil society.

3.4

The EESC would stress the technical nature of the three new authorities. Their status as autonomous bodies must remain subordinate to the political powers of the Commission and the European Parliament.

3.5

The EESC notes that financial institutions whose activities cover several Member States should benefit from the existence of greater uniformity in supervisory practices. It is particularly aware that the proposed scheme does not in itself create any new constraints for financial actors, whose costs are passed on to users, except in cases where states which have benefited from regulatory arbitrage and distortions of competition have to bring their practices into line.

3.6

The EESC approves the inclusion of the principles of ‘better lawmaking’ in the proposed scheme by means of public consultations and impact studies right from the conception stage. Similarly, it welcomes the concern for flexibility and necessity that the Commission intends to promote.

3.7

As regards the collegial nature of the three new authorities, the EESC is in favour of there being a balance between the different national authorities in the event of any differences. In its view, collegiality means that national authorities adopt joint decisions without showing any preference based on market size or the presence of operators outside their country of origin.