EC makes plans to replace CEIOPS
27 May 2009
Written by Sophie Baker
Reforms have been proposed to the current architecture of
financial services committees by the European Commission (EC) adopted
Communication on Financial Supervision in Europe, which would in effect
replace the Committee of European Insurance and Occupational Pensions
Supervisors (CEIOPS).
The new proposals, which aim to improve cross-border cooperation and understanding
between regulators in Europe, would see the creation of a new European
Systemic Risk Council (ESRC) and European System of Financial Supervisors
(ESFS), composed of new European Supervisory Authorities.
The announcement was made by President of the EC, José Manuel Barroso:
“Better supervision of cross-border financial markets is crucial
for ethical and economic reasons. That is why I asked Jacques de Larosière
and his group to produce their report. The Commission is making proposals
today to help restore confidence, guard against future crises and protect
growth and jobs. The new system will help the EU and its Member States
to tackle both problems with cross-border firms and the build up of overall
systemic risk.”
Barroso is urging EU leaders at the June European Council to give their
support to the steps he set out, leading to the new architecture up and
running in 2010.
Internal market and services commissioner, Charlie McCreevy, added: “Financial
supervision in Europe has not kept track with market integration. The
crisis has shown that the current system is not sufficiently responsive
and not appropriate for a single financial services market. This new system
will combine the expertise of all those responsible for safeguarding financial
stability, with strong European bodies to coordinate their work. With
this initiative, the Commission is responding to the weaknesses identified
during the crisis as well as to the G20 call to take action to build a
stronger, more globally consistent, regulatory and supervisory system
for financial services.”
The ESRC would monitor and assess risks to the stability of the financial
system as a whole, while the ESFS is designed for the supervision of individual
financial institutions, consisting of a robust network of national financial
supervisors working in tandem with new European Supervisory Authorities.
These will be created by the transformation of existing Committees for
the banking securities and insurance and occupational pensions sectors.
Implementation arrangements will be monitored and their effectiveness
carefully assessed. A full review will take place no more than three years
after the entry into force of both pillars of the European financial supervisory
framework that is proposed in the Communication.
The European Fund and Asset Management Association (EFAMA) has welcomed
the initiative: “The supervisory package is an important step towards
a more efficient EU system of financial supervision,” commented
Peter De Proft, director general of EFAMA. “Now is the time to address
the weaknesses in the current arrangements for macro and micro prudential
supervision at EU level.”
The Commission would welcome stakeholder reactions to the proposals here.
