Date: 5th October 2016
Author:
Type: In the news
The European Securities & Markets Stakeholder Group (SMSG) which advises the European Securities & Markets Authority (ESMA) just published its own initiative response to the European Commission's Public Consultation on the review of the European Financial Supervision System (ESFS).
The SMSG position is very much in line with the one recently released by EuroFinUse:
- It calls for improving product intervention powers (regulatory powers to warn about or temporarily ban or restrict certain financial products), better reporting on "consumer trends", adequate secretarial support and adequate compensation for non-industry and not-for-profit members.
- It also asks to improve the governance of the ESAs (European Supervisory Authorities) by opening up their boards to qualified people other than the national supervisors (who are the same entities that fall under the ESA's responsibility to control) and thus removing the potential conflicts of interest.
- Finally it recommends moving towards a "twin peaks" financial supervision model like the one recently adopted by the UK, with an Authority responsible for banking and insurance issues and another Authority responsible for conduct of business and market issues. Splitting prudential supervision and customer protection would prevent the occurrence of conflicts of objectives by financial supervisors.