Supervision of pan-European
financial institutions
Introduction
• The current
system of national supervision leads to supervisory overlap
and complexity for cross-border firms acting in the banking
sector as well as for multi-jurisdictional operators of markets
such as stock exchanges. Although most of the difficulties
encountered by those two groups are similar, solutions may
differ.
• For financial institutions, if a crisis arose at a
subsidiary located in a different member state to the parent
company, it is not always clear which supervisor would be
responsible for dealing with the situation.
• An efficient and effective supervisory framework requires
all elements of the safety network for banks to fit into an
overall architecture in which all stakeholders understand
their responsibilities and are able to act together.
• Further analysis of the situation is needed; any action
should respond to market evolution and institutional changes
should only be considered if evolutionary action is judged
inadequate.
• For multi-jurisdictional operators of markets, the
issue is to determine how several “home” regulators
with equivalent concerns and duties over a multi-jurisdictional
entity can exercise their powers in a manner that allows for
smooth and cost efficient operation in several jurisdictions.
