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On 23 September, the EU Commission adopted its long-awaited proposal for regulation on the European supervisory structures in the finance sector.



Head of UNI Finance, Oliver Roethig, said: “As we already knew, the proposal from the Commission could be far more ambitious, but there are some good elements in it as regards stakeholder consultation and the recognition of employees in the sector as relevant and important stakeholders in the supervision of the companies.



The proposal includes the formation of a stakeholder group with representation of industry, employees and consumers to be consulted by the new European Supervisory Authorities.



“UNI Finance is continuously working to make the importance of finance employees in supervisory and regulatory processes clear to the legislators. This is a sign that our message has come across”, said Roethig.



“But there is still a long way to go”, he said. “Employees should be involved in the supervision of companies at all levels, not least in the process of providing information on the situation in the company to the supervisors. Supervision should not be based solely on information that management provides. It should be normal procedure that employees in the company are interviewed to give their assessment”.



"Dialogue between supervisory authorities and trade unions in the finance sector is already practice in some EU countries with very good results. This practice should be extended to all countries", said Roethig.



As already clear from earlier communications from the Commission, the prosal does not include a single EU supervisory body in the EU, but an integrated structure enhancing coordination, cooperation and exchange of information between the national supervisors. Two new bodies will be established: a European Systemic Risk Board, ESRB, responsible for macro-prudential supervision, and a European System of Financial Supervisors, ESFS, coordinating between national supervisors looking after the micro-prudential supervision through the three European Supervisory Authorities, ESA (the current Level 3 Committees).



The proposal is clearly a step forward compared to the highly disintegrated system that currently exists. However, though it is reasonable that day-to-day supervision for the time being remains a national matter, it is also clear that there must be pushed for a higher level of centralisation – with the proper involvement of national supervisors. A decentralised supervision system is ineffective and insufficient in an ever more integrated multinational finance companies.



Some of the problems that can be foreseen with the suggested structure is a lack of enforcement power of the new bodies. The ESRB will have no sanctioning powers to ensure that states follow the warnings and recommendations issued by the body. The ESA will have the power to do binding mediation between national supervisors in case of dispute, but the decision can be appealed, which means that the EU Council would have the last word, and this is not necessarily inclined to look after the common interests of the Community.



Oliver Roethig said: "It must be ensured that we do not end up with a toothless system without any real powers. Most important is that the current proposal is not further watered down on its way through Parliament and Council. UNI Finance will continue to work for this as well as for stronger involvement of employees and their unions in the future supervisory system".



Link to the Commission web site with the proposals: http://ec.europa.eu/internal_market/finances/committees/index_en.htm