European supervision system

The financial crisis has pointed up the need to reinforce the structure of financial supervision within the European Union. In the context of the new supervisory system, it is essential to be able to detect any risks to stability and to set up an efficient alert system. Moreover, the new structure meets the objective of a single, stable market for financial services bringing together all the national supervisory authorities within a European operational network which has shared and mutually reinforcing responsibilities.

The European System of Financial Supervision is made up of:

  • The ESRB is in charge of monitoring and analysing any risks to the stability of the financial system arising from macroeconomic developments and developments within the financial system as a whole (macroprudential oversight). To this end, the ESRB issues early warnings in cases where system risks are building up and, if necessary, makes recommendations for measures to be taken to deal with these risks.

  • These Authorities work together in a network, interacting with the existing national supervisory authorities in order to ensure the financial soundness of the financial institutions themselves and to protect users of financial services (microprudential supervision). The new European network combines supervision of companies at national level with close coordination at European level, so as to encourage regulatory harmonisation as well as consistency in supervision and in implementation of the rules.

  • These will be set up so that the national supervisory authorities can reach agreement and coordinate work on matters concerning cross-border establishments or within colleges of supervisory authorities.