Highlights

© Fotolia, Mijakowska

On 9 June 2009, the Ecofin Council expressed its support for a planned reform of the EU's financial supervision framework. Finance ministers stressed the need for ambitious measures to strengthen regulation and supervision, taking into account their own role in this area.

The reform is based on the vision set out by a high-level group chaired by the former managing director of the International Monetary Fund, Jacques de Larosière. Its central elements are the establishment of a European System of Supervisors and, for the first time, the creation of a European body to monitor risks to the financial system as a whole.

The proposed new architecture will work on two levels:

• A European Systemic Risk Board (ESRB) will continuously assess the stability of the financial system. Where necessary, it will issue risk warnings and recommendations to policy-makers and supervisors and monitor their follow-up.

• A European System of Financial Supervisors (ESFS) will comprise three EU-level supervisory authorities covering the sectors of banking, securities and insurance. They will work in a network with existing national supervisors, which are responsible for the day-to-day oversight of individual financial firms.

The suggested new regime will be submitted to heads of state and government, who will meet on 18 and 19 June, with a view to reaching a consensus. The aim is to have both components of the new system fully in place in the course of 2010.

More information:
Council conclusions(pdf) 
Council webcast of press conference 
Financial services supervision - Commission website