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European Systemic Risk Board

European Systemic Risk Board. Governance: Steering Committee: 3 central bankers, 3 chairs of ESAs, 1 Commissioners, 1 Finance Minister delegate General Board Only consultative Tasks: define, identify and prioritise all macro-financial risks;

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European Systemic Risk Board

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  1. European Systemic Risk Board • Governance: • Steering Committee: 3 central bankers, 3 chairs of ESAs, 1 Commissioners, 1 Finance Minister delegate • General Board • Only consultative • Tasks: • define, identify and prioritise all macro-financial risks; • issue risk warnings and give recommendations to policy makers, supervisors and public; • monitor follow-up of the risk warnings; • liaise with international counterparts; • Based within ECB

  2. European Supervisory Authorities • Governance: • 1 Steering Committee of chairs of 3 ESAs • Per authority: Chairs of 27 national functional supervisors • Tasks: • single rulebook; • harmonise supervisory practices; • strengthen the oversight of cross-border groups (participate and mediate in colleges) and supervise pan-European entities (CRAs, CSDs, CCPs); • establish a central European supervisory database. • Upgrade of CEBS, CESR, CEIOPS

  3. Legal basis • Best would be EU Treaty change, but this is excluded • Within current Treaty: • Art. 95: to complete single market, can be adopted in QMV, but with EP co-decision • Art. 308: unanimity, only EP consent • Art. 105.6: to extend ECB powers for banking supervision, but with unanimity • Pushes to limits of EU competence • In pract. 4 regulations and 1 Council decision

  4. EU agencies • 28 EU regulatory agencies exist today • e.g. Food agency, Pharmaceutical agency, Eurocontrol • No general rule regarding their powers, governance, funding, etc. • Average employment 200 persons • Legal base could be challenged: • the authorities could never have more competences than the delegating authority • See Meroni (1958) & Enisa (2004) ECJ cases

  5. Evaluation • ESRB: • Main problem is of conceptualand institutional nature • Better to have it as consultative only committee, • reduces conflicts with central bank (and supervisors) • difficulty of predicting systemic risks • Cfr. debate on US Systemic Risk Council • ESFS: • Enormous workload ahead: main problem is of organisational and operational nature • Will member states accept supervisory powers? • Mediation in colleges has fiscal implications

  6. Comparing EU and US debate • US: • Debate mainly focused on Systemic Risk Council • Strengthening of supervisory powers of Fed • other reforms disappointing • EU: • Debate mainly focused on ESFS • No formal increase in powers of ECB, maintains clear distinction btw. supervisory and monetary • Could in long term lead to more unified structure, but maintains too much of a functional approach

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