Brussels, 10 January 2019 – As part of the latest review of the European System of Financial Supervision, European Parliamentarians have proposed today important improvements in the area of consumer protection, stakeholder groups and the inclusion of sustainability factors, but they missed the opportunity of better addressing systemic risk in the EU’s financial system.
As approved by today’s vote, the European Parliament ECON Committee proposes the following consumer protection improvements, that Finance Watch called for as part of an alliance with the European Consumer Organisation BEUC, Better Finance, AGE Platform Europe and The European Families Association COFACE:
- an explicit conduct of business supervision role for the European Supervisory Authorities (ESAs),
- strengthening the ESAs product intervention powers,
- a role for the ESAs to ensure a level EU playing field for products, services and redress,
- the possibility for the ESAs to conduct own-initiative reviews,
- granting the ESAs power to investigate and make recommendations were there are threats to consumer protection and
- giving the ESAs the possibility to coordinate National Competent Authority mystery shopping exercises.
Finance Watch’s Secretary General, Benoît Lallemand, welcomed the report on the European Supervisory Authorities (ESAs):
“In light of numerous mis-selling and fraud scandals and the insufficient implementation and enforcement of EU law, strengthening the roles of the European Supervisory Authorities to investigate and act where there are threats to consumer protection has been long overdue.
“The ESAs have the objective of protecting the public interest. Improving the balance of their stakeholder groups is also an important step to lower the risk of once again allowing the industry to write its own rules by influencing the direction that the ESAs take in their work.
“By including environmental, social and governance related risks as an explicit part of the ESAs work, regulators finally acknowledge that their mission goes beyond prudential supervision and consumer protection to include the purpose of finance.”
However, he deploys the remaining gaps on the side of macro-prudential supervision in the report on the role of the European Systemic Risk Board (ESRB):
“Systemic risk does not stop at national borders. Considering the cross-border nature of financial markets, the opportunity in the review process to strengthen the role of the European Systemic Risk Board (ESRB) has been missed so far.
“The ESRB should have a role in ensuring better harmonisation of macro-prudential rules in the EU such as countercyclical buffers, the systemic buffers and the designation of institutions as Other Systemically Important Institutions (O-SIIs).”
For further information or interview requests, please contact:
Charlotte Geiger, Senior Communications Officer at Finance Watch, at email@example.com or at 0032/(0)474331031.
NOTES TO EDITORS
On 10 January 2018, the Economic and Monetary Affairs (ECON) Committee of the European Parliament approved reports proposing amendments to the founding regulations of the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). This is part of a review of the European System of Financial Supervision that the Commission should undertake at three year intervals under Article 81 of the founding regulations of the ESAs (Regulation EU No. 1093/2010, Regulation EU No. 1094/2010 and Regulation EU No. 1095/2010).
Further Finance Watch publications on this topic:
- Finance Watch Blueprint on the European System of Financial Supervision (February 2018): https://www.finance-watch.org/wp-content/uploads/2018/08/blueprint-esfs-feb2018.pdf
- Finance Watch Joint Letters as part of an alliance with the European Consumer Organisation BEUC, Better Finance, AGE Platform Europe and The European Families Association COFACE on the European System of Financial Supervision from November 2017: https://www.finance-watch.org/wp-content/uploads/2018/08/eu-financial-supervisory-reform-letter-1.pdf and July 2018: https://www.finance-watch.org/publication/joint-statement-econs-draft-report-on-the-review-of-the-european-financial-supervisors/