IDEAS home Printed from
   My bibliography  Save this paper

The EU Financial Supervision in the Aftermath of the 2008 Crisis: an Appraisal


  • Georges Caravelis


We appraise the new EU supervisory architecture presented by the Commission in a package of five 'draft legislative acts'. Two would establish a European Systemic Risk Board (ESRB) to undertake macro-prudential issues. Three would establish the system of European Supervisory Authorities (ESAs): Banking, Securities and Insurance.. . The theoretical case for this package of 'draft legislative acts' has been made by the High-Level Group on Financial Supervision in the EU. The ' package ' has been examined by the ECOFIN of 2 December 2009, which agreed on a 'general approach'; it has introduced changes to the Commission's three draft legislative acts concerning the European Supervisory Authorities (ESAs). We examine the theoretical approach underlying the draft legislative acts, which is based on the State theory of money. We find it incomplete in the case of the ESRB because the mission of ECB in 'mitigating system risks within the financial system' cannot be attained without real powers and tools; it is in essence a Macro-economic phenomenon.. . We also arrive at another conclusion relating to the three proposals on the ESAs. The theoretical underpinning of the three is based on the premise of 'regulating for the sake of regulation'. Today's evolution of the EU cannot allow Authorities over-passing the Treaty competence. Nor could the ESAs attain their objective of 'setting the common rules for supervising national entities'. Thus the conception of the EU system of financial supervision is deficient, in need of repair.. . We propose an alternative approach to the new EU supervisory architecture consisting of three elements. First, we restate the case for the Central Banks in order to assume responsibility for the 'last resort of managing risk', and endowed with real power. Second, the role of the national central banks (NCBs) in 'micro-supervision' is substantial enhanced. Third, a structure for the budgetary burden is proposed by the establishment of the 'European Fund for Financial Stability' (EFFS)..

Suggested Citation

  • Georges Caravelis, 2010. "The EU Financial Supervision in the Aftermath of the 2008 Crisis: an Appraisal," RSCAS Working Papers 2010/11, European University Institute.
  • Handle: RePEc:rsc:rsceui:2010/11

    Download full text from publisher

    File URL:
    File Function: Full text
    Download Restriction: no


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rsc:rsceui:2010/11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RSCAS web unit). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.