Overview of Financial Services Supervision and Committee Architecture

Currently, three committees exist at the EU level in the financial services sector, with advisory powers, the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Committee (CEIOPS) and the Committee of European Securities Regulators (CESR). These are often known as the Lamfalussy level 3 Committees because of the role which they play in the EU framework for financial services legislation, created following a report by a group chaired by Alexandre Lamfalussy. In January 2009 the Commission took action to strengthen the powers of these committees and proposed a financial instrument giving them a secure financial basis for their work. In February 2009 a report by a high-level group chaired by J. de Larosière recommended transforming the three Committees into European Authorities, with commensurately increased powers to, inter alia: - Co-ordinate the work of national supervisors, - Arbitrate between national supervisors in supervisory colleges in - cases of disagreement on supervisory issues regarding a cross-border financial institution; - Take steps to harmonise national regulatory rules and move towards a common European rulebook; - Directly supervise certain pan-European institutions which are regulated at EU level, such as Credit Rating Agencies. On 27 May 2009 the Commission adopted a Communication describing its plans for putting into effect the recommendations of the de Larosière report. This was followed by legislative proposals in September 2009On December 2009, the Council reached agreement on proposals to create three European authorities for the supervision of banking, insurance and securities markets, as part of a reform of the EU's supervisory framework in the wake of the global financial crisis. It called on the presidency to start negotiations with the European Parliament with a view to adoption of the texts at first reading, so as to allow the new framework to be put into place during the course of 2010.See the detailed page on the European Commission website.