On the 10th of January, the Economic and Monetary Affairs (ECON) Committee of the European Parliament voted on the European Commission’s proposal to reform the European Supervisory Authorities (ESA), which include 3 bodies dealing with the financial supervision at the European level: EIOPA (Pensions and Insurance), EBA (Banks) and ESMA (Securities and Markets).
The document adopted by the Committee will serve as a basis for the European Parliament in its negotiations with the European Commission and European Council, leading to the adoption of the final legislative text.
The three ESA bodies are key in implementing the various Directives relevant to financial service providers and the financial system more generally. From a consumer protection perspective and as a member of the EBA’s Banking Stakeholder Group, COFACE-Families Europe welcomes this vote. The document adopted by the ECON Committee includes many crucial elements to enable more effective consumer protection and enforcement of existing legislation. Among the most positive recommendations of the text, we find:
- A stronger mandate to contribute to achieving a level playing field where consumers can have access to fair and comparable financial services, products and redress
- Mystery shopping activities to be coordinated with the National Competent Authorities (NCAs);
- More product intervention by making a ban of products permanent if it is renewed after the initial 6 month period;
- Better compensation to ensure the independence and participation of non-industry members of the Stakeholder groups;
- A broader competence in considering environmental, social and governance factors in their mandate;
- Powers to conduct an independent inquiry of a financial service provider or financial product on the basis of consumer protection concerns.
However, the text does not go far enough on the following points:
- Mystery shopping exercises cannot be conducted directly by the ESAs (the ESAs have to rely on the National Competent Authorities to conduct these);
- EIOPA will not have broader product intervention powers;
- No possibility for the ESAs to report to the Commission uneven enforcement/transposition of EU law which creates distortions in the single market;
- ESAs cannot impose fines or conduct investigations (only inquiries are allowed, which restricts the scope of action);
- No enhancement of the powers of Stakeholder groups to oppose guidelines from ESAs.
COFACE-Families Europe will continue to monitor the development of the ESA reform and will advocate, in cooperation with BEUC, Finance Watch, AGE and Better Finance, for reinforcing the powers of the ESAs in consumer protection.
For more information, contact Martin Schmalzried: email@example.com