Arthur Docters van Leeuwen and Fabrice Demarigny
The Committee of European Securities Regulators (CESR) has an important role in the fourlevel Lamfalussy process for regulatory reform. At present, CESR produces at level 3…
Abstract
The Committee of European Securities Regulators (CESR) has an important role in the fourlevel Lamfalussy process for regulatory reform. At present, CESR produces at level 3 administrative guidelines, interpretative recommendations, common standards, peer reviews and comparisons of regulatory practice to improve consistent application and enforcement of EU legislation. These activities can be divided into three categories: (i) coordinated implementation of EU law, (ii) regulatory convergence and (iii) supervisory convergence. Within each of these categories additional activities of CESR should be developed further while also recognising the role of other key players such as the member states and the European Commission. With regard to the coordinated implementation, it is considered useful to keep alive the network of CESR experts who prepared CESR’s level 2 advice to the European Commission to fulfil a permanent advisory role. Furthermore, harmonised rulemaking powers for national securities regulators would facilitate further coordinated work at level 3 with respect to regulatory convergence. In this respect, it may be worthwhile for the Commission to take the initiative, where and when appropriate, to endorse common approaches of CESR members as a proper manner for applying EU law. Supervisory convergence could be enhanced by undertaking joint investigations by CESR members and setting up information databases on enforcement activities. In addition, the Monitoring Group encouraged CESR to set up an internal system of mediation for solving conflicts between national securities regulators.
Details
Keywords
To describe the 5th May 2006 ECOFIN conclusions on supervisory convergence and explain why they represent a new departure for European financial services work.
Abstract
Purpose
To describe the 5th May 2006 ECOFIN conclusions on supervisory convergence and explain why they represent a new departure for European financial services work.
Design/methodology/approach
The article outlines the 6th 2006 ECOFIN conclusions relating to supervisory convergence. It then reviews EU developments relating to supervisory convergence from the 2001 Lamfalussy Process onwards as context for the conclusions. Finally, in the light of the review and the description of the conclusions it draws some conclusions about the likely implications for further developments in the EU in relation to EU supervisory convergence.
Findings
The principal findings are that supervisory convergence is likely to increase due to enhanced political backing with member state finance ministries and regulators taking a leading role.
Research limitations/implications
As this is the first paper on the ECOFIN conclusions there is considerable scope for ongoing research to establish the extent to which the predictions in the paper prove to be justified by future developments.
Practical implications
The ECOFIN conclusions represent a departure from EU financial services work focused on a legislative programme, the Financial Services Action Plan, to a programme focusing on improving cross‐border relationships between supervisors. This has important implications for the key European actors and gives a strong role to national finance ministries and supervisors. The practical implications will be enhanced cooperation between national supervisors on a cross‐border basis. The paper argues for strong financial services industry involvement in this.
Originality/value
The value of the paper is twofold – Its primary value is as the first academic analysis of the ECOFIN conclusions and as a predictor of their likely influence on EU institutional balance in the financial services area. Secondly it is a useful review of the main developments with regard to EU supervisory convergence over the five years 2001‐2006 – something which, to be the best of my knowledge, has not previously been carried out in the academic literature.