The Commission sought views among other things, on the operations of the ESAs and on their ability to protect the public interest by contributing to the short, medium and long-term stability and effectiveness of the financial system for the benefit of the Union economy and its citizens.
- Consumer protection remains underdeveloped and under-resourced, and its supervision by three authorities with overlapping mandates hampers the creation and implementation of consistent and effective consumer protection regulation.
- There is therefore a need to set up a separate EU supervisor that would focus on defending consumer interests in financial services, for example under the ‘twin peaks’ approach, in which consumer protection and market conduct are handled by one authority, and prudential matters by another.
- There are several newly emerging areas such as fintech, insurance tech or robo-advice where new regulatory and supervisory approaches are needed and ESAs should be involved in developing the right standards. We should not rely on self-regulation in these areas.
- We believe it is time for regulators and supervisors also to engage on the purpose of finance, beyond prudential supervision and consumer protection. ESAs should not be seen as lagging behind the international momentum for green and broader sustainable finance, for example on how to finance the Sustainable Development Goals, which ultimately have a bearing on financial stability and consumer protection. (see also our recent letter to ESMA co-signed with other civil society organisations as well as our joined briefing “The role of ESMA in sustainable finance“)
- ESA stakeholder groups face the serious challenge that non-industry stakeholders lack resources. Non-industry stakeholders should continue to be remunerated for attending meetings of stakeholders groups and this should be extended to include adequate preparation time and secretarial support to help level the playing field with industry participants.
- ESAs need adequate and sustainable funding in order to meet ambitious supervisory targets and this has not always been guaranteed. We think the operations of the ESAs should be co-financed by public and private sources of financing: public financing would provide for better democratic scrutiny as the parliament will have overview and control over the budget, while the private sector should also contribute to the cost of its supervision.