On 22 March 2017, we blogged that the European Commission (Commission) issued a consultation on the European Supervisory Authorities – the European Banking Authority, the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (together the ESAs). The consultation was designed to gather evidence on the operations of the ESAs focusing on a number of issues in the following areas: (i) tasks and powers; (2) governance; (3) supervisory architecture; and (iv) funding.

The European Central Bank (ECB) has now published its response the Commission. Among other things, in its response the ECB:

• supports the objective of fostering effective and consistent prudential supervision and regulation across Europe;
• supports further integration of the supervisory framework at the EU level, both for banking and for the capital markets;
• reiterates that a strong Capital Markets Union (CMU) will, in the long run, require the creation of a single capital markets supervisor;
• supports the Commission’s move towards more integrated supervision for certain segments of the capital markets and towards a greater role for the central bank of issue;
• reiterates its call for strengthened macro-prudential supervision for capital markets and extending the macro-prudential toolkit for non-banking activities;
• supports a review of the governance structure of the ESAs, including a review of the voting rights and membership structure of their boards, to ensure that the European dimension is fully reflected in their decision-making; and
• based on ESMA’s current competencies and tasks within the existing institutional framework, the ECB supports a review of the composition of the ESMA board of supervisors, granting the ECB observer status.

View ECB response to European Commission consultation on operations of ESAs, 7 July 2017