The European System of Financial Supervision (ESFS)
Four new bodies have been introduced in the European Regulatory system on 24th of
November 2010: the European Systemic Risk Board on the one hand and 3 others on the
other hand: European Securities and Markets Authorities (ESMA), the European Banking
Authority (EBA) and the European Insurance and Occupational Pensions Authority
(EIOPA). The objective of the European supervisory authorities is to improve the
functioning of the internal market by ensuring appropriate, efficient and harmonized
European regulation and supervision of the stability of the whole European financial
system.
The European Systemic Risk Board (ESRB) was established on 16 December 2010 in
response to the ongoing financial crisis to supervise the stability of the European financial
system as a whole. It has some advantages and disadvantages. Pros: 1. The establishment
of a Community level body to monitor systemic risks at EU level is just as reasonable as
the proposed close cooperation between the IMF and the Financial Stability Board. 2. It is
appropriate that the warnings and recommendations of the ESRB are to be non-binding
and strictly non-public.
Cons: The composition of the General Board of the ESRB causes a conflict of interest:
National central banks, European supervisory authorities and the EU Commission can be
affected by their own warnings and recommendations.
The European Securities and Markets Authority (ESMA) is an independent EU
Authority that contributes to safeguarding the stability of the European Union’s financial
system by ensuring the integrity, transparency, efficiency and orderly functioning of
