Week
1
European
System
of
Financial
Supervision
(ESFS)
The
ESFS
was
created
as
a
decentralised,
multi-‐layered
system
of
micro-‐
and
macro-‐prudential
authorities
in
order
to
ensure
consistent
and
coherent
financial
supervision
in
the
EU.
This
supervisory
system
is
currently
undergoing
major
changes
further
to
the
introduction
of
a
Banking
Union.
Background
and
Objectives
The
micro-‐prudential
pillar
at
European
level
is
formed
by
the
European
Banking
Authority
(EBA),
the
European
Securities
and
Markets
Authority
(ESMA)
and
the
European
Insurance
and
Occupational
Pensions
Authority
(EIOPA),
which
work
together
in
the
Joint
Committee
of
the
European
Supervisory
Authorities
(ESAs).
Macro-‐prudential
oversight
is
performed
by
the
European
Systemic
Risk
Board
(ESRB).
The
respective
Member
States’
competent
national
supervisory
authorities
are
also
part
of
the
ESFS.
The
objective
of
the
ESFS
include
developing
a
common
supervisory
culture
and
facilitating
a
single
European
financial
market.
Framework
of
the
ESFS
Micro-‐prudential
supervision
and
regulation
The
supervision
of
individual
institutions
is
characterized
by
a
multi-‐layered
system
of
authorities.
Various
coordination
bodies
and
instruments
are
created
to
ensure
consistency
and
coherence
between
the
different
layers.
1. European
Supervisory
Authorities
(ESAs):
responsible
at
European
level,
whereas
day-‐
to-‐day
supervision
is
conducted
at
national
level.
The
EBA,
EIOPA
and
the
ESMA
are
independent
and
act
only
in
the
interest
of
the
union
as
a
whole.
a. EBA:
seat
in
London
and
its
scope
includes
credit
institutions,
financial
conglomerates,
investments
firms
and
payment
institutions.
The
EBA
contributes
to
the
development
of
the
Single
Rulebook
by
drafting
technical
regulatory
standards
and
implementing
these.
It
issues
guidelines
and
recommendations
and
has
certain
powers
in
relation
to
breaches
of
EU
law
by
national
supervisory
authorities.
b. EIOPA:
seat
in
Frankfurt
am
Main
and
similar
set-‐up
as
EBA,
but
primarily
concerned
with
insurance
undertakings
and
institutions
for
occupations
retirement
provision.
c. ESMA:
seat
in
Paris
and
set-‐up
similar
to
EBA,
but
its
scope
covers
securities
markets
and
participants.
The
ESMA
has
sole
responsibility
for
the
registration
and
supervision
of
credit-‐rating
agencies
and
trade
repositories
in
the
EU.
2. Joint
Committee
of
the
European
Supervisory
Authorities:
responsible
for
overall
and
cross-‐sectoral
coordination,
with
the
aim
of
ensuring
cross-‐sectoral
supervisory
consistency.
3. Competent
national
supervisory
authorities:
each
Member
State
designates
its
own
competent
authority,
which
form
part
of
the
ESFS
and
are
represented
in
the
ESAs.
1
1
European
System
of
Financial
Supervision
(ESFS)
The
ESFS
was
created
as
a
decentralised,
multi-‐layered
system
of
micro-‐
and
macro-‐prudential
authorities
in
order
to
ensure
consistent
and
coherent
financial
supervision
in
the
EU.
This
supervisory
system
is
currently
undergoing
major
changes
further
to
the
introduction
of
a
Banking
Union.
Background
and
Objectives
The
micro-‐prudential
pillar
at
European
level
is
formed
by
the
European
Banking
Authority
(EBA),
the
European
Securities
and
Markets
Authority
(ESMA)
and
the
European
Insurance
and
Occupational
Pensions
Authority
(EIOPA),
which
work
together
in
the
Joint
Committee
of
the
European
Supervisory
Authorities
(ESAs).
Macro-‐prudential
oversight
is
performed
by
the
European
Systemic
Risk
Board
(ESRB).
The
respective
Member
States’
competent
national
supervisory
authorities
are
also
part
of
the
ESFS.
The
objective
of
the
ESFS
include
developing
a
common
supervisory
culture
and
facilitating
a
single
European
financial
market.
Framework
of
the
ESFS
Micro-‐prudential
supervision
and
regulation
The
supervision
of
individual
institutions
is
characterized
by
a
multi-‐layered
system
of
authorities.
Various
coordination
bodies
and
instruments
are
created
to
ensure
consistency
and
coherence
between
the
different
layers.
1. European
Supervisory
Authorities
(ESAs):
responsible
at
European
level,
whereas
day-‐
to-‐day
supervision
is
conducted
at
national
level.
The
EBA,
EIOPA
and
the
ESMA
are
independent
and
act
only
in
the
interest
of
the
union
as
a
whole.
a. EBA:
seat
in
London
and
its
scope
includes
credit
institutions,
financial
conglomerates,
investments
firms
and
payment
institutions.
The
EBA
contributes
to
the
development
of
the
Single
Rulebook
by
drafting
technical
regulatory
standards
and
implementing
these.
It
issues
guidelines
and
recommendations
and
has
certain
powers
in
relation
to
breaches
of
EU
law
by
national
supervisory
authorities.
b. EIOPA:
seat
in
Frankfurt
am
Main
and
similar
set-‐up
as
EBA,
but
primarily
concerned
with
insurance
undertakings
and
institutions
for
occupations
retirement
provision.
c. ESMA:
seat
in
Paris
and
set-‐up
similar
to
EBA,
but
its
scope
covers
securities
markets
and
participants.
The
ESMA
has
sole
responsibility
for
the
registration
and
supervision
of
credit-‐rating
agencies
and
trade
repositories
in
the
EU.
2. Joint
Committee
of
the
European
Supervisory
Authorities:
responsible
for
overall
and
cross-‐sectoral
coordination,
with
the
aim
of
ensuring
cross-‐sectoral
supervisory
consistency.
3. Competent
national
supervisory
authorities:
each
Member
State
designates
its
own
competent
authority,
which
form
part
of
the
ESFS
and
are
represented
in
the
ESAs.
1
