European System of Financial Supervision
European System of Financial Supervision

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • European System of Financial Supervision
  • European Banking Authority (EBA)
  • European Insurance and Occupational Pensions Authority (EIOPA)
  • European Securities and Markets Authority (ESMA)
  • European Systemic Risk Board (ESRB)
  • Joint Committee of the European Supervisory Authorities

This Practice Note looks at the European System of Financial Supervision (ESFS) and micro-prudential supervision on an EU level. It should be read in conjunction with Practice Notes: Relationship between UK regulators and European Supervisory Authorities, European supra-national bodies—how policy ideas are translated into national legislative initiatives, and Powers of EU regulators—checklist.

The financial crisis exposed a number of important failures in financial supervision in response to which the EU established the European System of Financial Supervision (ESFS) in 2010. The ESFS is composed of the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), European Securities and Markets Authority (ESMA), who work alongside a network of national competent authorities (NCAs), the Joint Committee of the European Supervisory Authorities, and the European Systemic Risk Board (ESRB). The EBA, EIOPA and ESMA constitute the European Supervisory Authorities (ESAs) and are supported closely by the ESRB. The ESAs were established from previous Level 3 committees under the Lamfalussy framework. The ESAs hold responsibility for micro-prudential supervision on a European level and work with national supervisory authorities in order to achieve this. Their main objective is to maintain the stability and effectiveness of the EU financial system. The establishment of the Banking Union has a direct impact on the functioning of the ESFS, but not to the extent to which it would threaten their existence and

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