2013年-CEPS欧洲政策研究中心_European_Financial_System_Governance_8页_111kb

European Financial System Governance Summary

Core Content

The European financial system has undergone significant transformation over the past decade, shifting from a predominantly bank-based model to one that increasingly relies on capital markets, particularly bond markets. This evolution has been driven by the introduction of the euro, which has enhanced the liquidity and attractiveness of European debt instruments. The EU has also made substantial progress in reforming its financial governance structure, particularly through the Financial Services Action Plan (FSAP) and the establishment of Level 3 Committees (CESR, CEBS, and CEIOPS) for securities, banking, and insurance supervision.

Main Points

• FSAP Impact: The FSAP has been successful in improving the governance of the European financial system, leading to the creation of permanent supervisory committees.
• Supervisory Structure: The EU currently operates under a home-country control and mutual recognition model, which allows member states to retain some regulatory autonomy while promoting cooperation.
• Regulatory Fatigue: Supervisors and the financial industry face regulatory fatigue, making large-scale reforms unlikely in the near future.
• Market Integration: There is a growing demand for further integration of the financial sector, which could lead to spill-over effects in areas not covered by the current regulatory framework.
• Decentralisation: The decentralised supervision model is expected to persist, as centralised alternatives face political and constitutional challenges.
• Supervisory Convergence: The concept of supervisory convergence is gaining traction, but its meaning remains unclear. It is debated whether convergence should refer to objectives, procedures, or both.

Key Information

Financial System Evolution

• Bond Markets: The EU bond markets have grown significantly, from 84% of GDP in 1992 to 145% in 2004, almost matching US levels.
• Bank Assets: Bank assets in the EU have nearly doubled from €11.8 trillion in 1995 to €22 trillion by 2004, increasing from 169% to 237% of GDP.
• Equity Financing: Equity financing is more significant in the US than in Europe, with the US accounting for 116% of GDP compared to 54% in the eurozone.
• Corporate Debt: Corporate debt in the eurozone grew by 283% from 1999 to 2004, far outpacing global and US growth.
• Currency Denomination: The euro has become a major currency for international debt, with its share rising from 25% in 1993 to around 40% today.

Supervisory Challenges and Solutions

• Asymmetries: Information asymmetry between home and host countries is a key issue, especially in cross-border financial operations.
• Clearinghouse Proposal: A central clearinghouse for supervisory information is suggested to improve information exchange and macroprudential oversight.
• Level 3 Committees: These committees currently have an advisory role but may need more formal powers to ensure consistent enforcement and decision-making.
• Delegated Supervision: There is a call for delegated supervision to allow for more integrated oversight, though the legal and political implications are complex.
• Common Reporting Standards: The introduction of COREP and FINREP standards aims to improve cross-border cooperation and data sharing.

Supervisory Convergence

• Definition Ambiguity: The term "supervisory convergence" lacks a clear definition and is debated whether it refers to objectives, procedures, or both.
• Objectives Alignment: Aligning supervisory objectives (e.g., financial stability, consumer protection) is proposed as a first step, rather than full harmonisation of procedures.
• Political Will and Trust: Any meaningful convergence requires mutual trust and political will, as well as the maintenance of regulatory competition.

Conclusion

The current supervisory structure is seen as a phase rather than the final stage, with potential for further development. While full centralisation is unlikely, there is a need for consolidation, enhanced cooperation, and clarification of key concepts such as convergence. The EU Council and Level 3 Committees are expected to continue working on improving the efficiency and integration of the financial sector, with a focus on reporting standards, information sharing, and dispute resolution mechanisms.

References

• Level 3 Committees: CESR, CEBS, and CEIOPS.
• Key Documents: FSAP, prospectus directive, capital requirements directive, transparency directive, MiFID.
• Institutions Mentioned: European Commission, Eurofi, FSC, CEPS, ESFRC, FSA.

About CEPS

CEPS is an independent policy research institute established in 1983, dedicated to producing sound policy research and fostering collaboration among stakeholders in European financial governance. It operates through research networks, external collaborators, and publications. Its goals include academic excellence, policy discussion, and knowledge dissemination.