European System of Financial Supervision (ESFS) – review

Key points:

• The EESC welcomes the Commission's proposals that are a new, important step in the efforts to achieve greater integration and convergence by increasing integrated supervision and provide new building blocks for the realisation of the Capital Markets Union in the EU.
• The importance of a smoothly operating CMU should not be underestimated, as it can make an important contribution to private, cross-border risk-sharing.
• It is therefore very important and a priority to further pave the way for more cross-border market transactions. Companies must be able to make easier and more effective use of financing, with reduced administrative burdens and at a lower cost. For their part, consumers and investors need more and better choice and greater protection.
• The new supervisory environment should be based on a permanent concern to ensure the greatest possible clarity and legal certainty for all. The challenge is to find the right balance between the competences of national and European supervisors and, where possible, to apply the subsidiarity and proportionality principles. Action is needed to tackle lack of clarity, overlaps and other shortcomings in supervision that hinder or seriously impede the realisation of the Capital Markets Union.
• Keeping the future in mind, new developments and modern technologies, such as FinTech, as well as more sustainable financing, in line with international activities and agreements should be reflected in the system of supervision.
• Close attention should be paid to costs. Where part of the costs is directly borne by the private sector, care should be taken to exercise budgetary discipline and avoid duplication. Any alterations must be made in a transparent way and there must be appropriate control of overall resources. The industry should be appropriately involved.
• As in the past, all future steps should be based on dialogue and consultation with all bodies and other stakeholders, as well as on public consultations of all interested parties.
• The current legislative proposals represent a major step forward, but they are not the end of the story. In the EESC's view, we must continue to pursue the ultimate objective of a single European capital markets supervisor, as stated in the Five Presidents' Report.