Supervisor of supervisors must understand insurance
The European Commission has proposed a European Systemic Risk Council (ESRC) that will have an overseeing role and specific bodies for banking, insurance and securities in the European System of Financial Supervisors (ESFS).
Peter Vipond, the ABI’s director of financial regulation and taxation, said: “It looks like the ‘supervisor of supervisors’ that we have argued for will become a reality. It will provide consistency across Europe, something desperately needed by companies that operate across national boundaries.
“Insurers will want to ensure that regulatory bodies are staffed by people who understand insurance and accept that it raises very different supervisory issues from banking."
The FT quoted Jose Manuel Barroso, European Commission president as saying: "It will be now or never. If we cannot reform the financial sector and financial supervision when we have a real crisis, when will we reform it?"
But UK officials described the package as "a starting point for further discussions".
"Any reforms we make within the EU need to be workable, practical and consistent with the approach we are taking internationally through the G20," said a government spokesman.
Day-to-day supervision of companies would remain with national regulators. But the commission proposes to upgrade three pan-EU co-ordinating committees into new European Supervisory Authorities for the banking, insurance and securities sectors respectively.
The FT said these would develop harmonised rules and common approaches to supervision and would settle disputes between national supervisors and act fast in urgent situations or if national supervisors were stalling.
