Proposals , Conclusions and Dialogues

1. Proposals, Conclusions and Dialogues Piotr Madziar – European Commission 20 November 2009, XI European Banking Supervisors XBRL Workshop - Vienna

2. Topics • European Commission proposal for supervisory reform • Critics • Next steps?

3. Simplification - Reduction of Admin Burden De Larosiere Reform XBRL driving forces EU Council EP MS G20 Corporate governance and transparency E-Gov, Information Society, EU Competitivenss Simplification XBRL Crisis COM De Larosiere Stoiberg

4. De Larosiere Reform • Financial crisis driven • Position of national regulators? • Global aspect • Commission absolute priority.

5. European Parliament Resolution on Lamfalussy follow-up: future structure of supervision (September 2008) • Calls upon the L3 Committees to design common reporting standards • Multi-purpose format such as XBRL • Throughout the EU • Calls upon the Commission to submit adequate legislative proposals

6. De Larosiere proposal • Commission’s proposal of 23 September 2009 • ESRB and ESFS = ECB + ESAs + national regulators+… • Banking: colaterals, capital, fund transfer reg,… • Insurance: insurance and reinsurance, conglomerates, institutions, Solvency II, anti money laundering,… • Securities & Markets: transparency, markets in FI, market abuse, prospectuses, hedge funds, CRA, take-over bids, settlements, financial collateral arrangements, ... • Technical standards,… XBRL? • Links to international standard setters,… XBRL?

7. More powers for ESAs • Technical standards but criteria in Community legislation • Flow of information • Supervisory culture and supervisory practices • Last resort option in case of disagreement • Training programmes • Aggregate micro-prudential information from national supervisors • Set-up a Central European Database. The information will be available for the relevant authorities in colleges of supervisors and forwarded to the European Systemic Risk Council • Technical arrangements with international organisations and administrations of third countries.

8. € EBA – EuropeanBankingAuthority European Commission Chairperson ECA - European Court of Auditors Executive Director Mgt Board OLAF – l’Office européen de lutte anti-fraude BankingStakeholderGroup Proposed structure for Banking Board of Supervisors

9. EU Council - QMV Board of Appeal for 3 ESAs EBA QMV Member State Member State NSA NSA NSA Appeal processes EU Court of First Instance EU Court of Justice

10. Joint Committee of European Supervisory Authorities EIOPA - European Insurance and Occupational Pension Authority EBA - European Banking Authority NSA NSA NSA NSA College of Supervisors NSA NSA – National Supervisory Authority NSA NSA NSA NSA NSA NSA ESFS ESFS - EU System of Financial Supervisors ESMA - European Securities and Markets Authority

11. Information exchange 3rd Countries & Int’l ECB Information exchange Information exchange ESRB – European Systemic Risk Board ESFS – European System of Financial Supervision ESRB – EU Systemic Risk Board

12. Practicalities, Agenda • Financial assistance 37- 70 M€ in years 2011-2016 • 40% from the Community budget • London, Paris, Frankfurt • Status similar to EU Agency • 74-90 staff (2016) • EU Staff Regulation (independence, impartiality).

13. Financial Market-driven regulatory data reform Governments All Markets Common Reporting Framework Regulated Financial Markets ?

14. Tooambitious • Serious problems Great unease Critics Far too fast Far from clear

15. Critics R e a l a r g u m e n t s Sovereignty Global dimension Stop! Exclusion and Dominance Treasury

16. Critics R e a l a r g u m e n t s Sovereignty of MS: • Host states allowed to take steps if weaknesses are identified - that can be abused for commercial or protectionist reasons • ESAs empowered to overridenational regulators • Changes give EU more powers. Emergencydeclared by the Commission without involvement of the Council. Unclear emergency procedure. • MS should decide first what will ESAs do and how

17. Critics R e a l a r g u m e n t s Global cohesion: • Not clear how global cohesion is addressed • Need for allignment with G-20 and Basel. • It would be very bad for EU and its financial centres If we forge ahead disregarding what US, Switzerlandand others are doing

18. Critics R e a l a r g u m e n t s Fiscal responsibilities of MS: • June’s ECOFIN mandate (shoulnd’t impinge on the fiscal responsibility of the MS) breached • EU financial supervisory structure needs an EU fiscal arrangement

19. Critics R e a l a r g u m e n t s Exclusion and Dominance • Any compromise would need to assure that host states receive all prudential information about entire group. • Eurozone dominance in ESRB • Bankers dominance in ESRB, disregarding the fact that the choice between security and price is a democratic trade-off decision taken by governments, for the citizens. • QMV to recognize the size and importance of financial services relative to GDP

20. Options/Scenarios

21. Contacts • DG Internal Market & Services website: http://ec.europa.eu/dgs/internal_market/index_en.htm • Piotr Madziar +32-(0)2-2950869 piotr.madziar@ec.europa.eu