The Reform of Financial Supervision in Europe
In responding to the financial crisis, the EU has proposed both new regulations and new supervisory arrangements. It is also reviewing and amending an existing suite of financial services legislation.
The focus of this paper is the European Commission’s proposals in the area of supervisory reform. It begins with a discussion of the supervision function and the status quo before the financial crisis, before proceeding with a short summary of a report that effectively laid the basis for the EU’s supervisory response to the crisis. It then tracks the policymaking process as it unfolded in 2009 and evaluates the package of draft legislation as it stands now, in late 2009, adopted by the Commission and being negotiated under the co-decision procedure between the European Parliament, Council and Commission. Finally, it considers some issues relating to the establishment and operation of the bodies proposed in the draft legislation and offers some preliminary observations.