Too little power for new EU supervisory framework

The EU finance ministers on Tuesday gave the green light for the setting up of three new EU financial supervisory authorities, the EBA for banks, the EIOPA for insurance companies and the ESMA for stock markets. However the powers of these authorities have not yet been clearly defined, which moves the business paper Il Sole 24 Ore to express doubts about their potential efficiency: "The question is whether this is a single, joint framework of regulations or a confused patchwork cobbled together by the representatives of different organs locked in perpetual conflict with each other. ... The main problem concerns the scope of the powers of these authorities, whose main task it is to formulate binding regulations for the entire continent. The fact is that the EU treaties make no provision for the establishment of independent authorities with autonomous powers like those of the US Security and Exchange Commission (SEC). The European supervisory authorities will continue taking the credit for what others have achieved. The EU Commission and EU Parliament are entitled to ... refuse to recognise their regulations. In that case the European supervisory authorities would have to start all over again."

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