EU system for financial supervision
In response to the global financial crisis of 2008, the European Commission mandated a High Level Group chaired by Mr. Jacques de Larosière to propose solutions for the exposed during the crises failures in the European supervisory arrangements. The purpose was to achieve better protection of the citizens and rebuild trust in the financial system. The final report of de Larosière Group underlined that the supervisory arrangements should not focus only on the supervision of individual companies, but rather to place accent on the stability of the financial system as a whole.
In this connection on 1 January, 2011 four new European Regulations have came into effect which have substantial impact on the FSC work. With the new Regulations four new European Authorities have been set up, which have significant supervisory and regulatory powers in the field of the financial supervision. The new Authorities are:
- European Securities and Markets Authority (ESMA);
- European Insurance and Occupational Pensions Authority (EIOPA);
- European Systemic Risk Board (ESRB), which will monitor and assess potential threats to the financial stability that arise from macro-economic developments and from the developments within the financial system as a whole;
- European Banking Authority (EBA).
The above Authorities are part of the new European System of Financial Supervisors (ESFS). Besides ESMA, EIOPA, ESRB and EBA, the ESFS includes Board of Supervisors of each European Supervisory Authority (ESA) and the national supervisory authorities in the Member States. The main objective of ESFS is to guarantee that the established rules are applied in an appropriate way throughout the EU, so that to preserve the financial stability and to ensure confidence in the financial system and sufficient extent of protection of the consumers of financial services.
As an authority carrying out supervision over the capital markets, insurance and the supplementary pension insurance, FSC is a member of two of the three Authorities, and namely: ESMA and EIOPA and is seriously involved in the work of the third - ESRB.
FSC also represents Bulgaria in two Committees with the European Commission, namely European Securities Committee (ESC) and European Insurance and Occupational Pensions Committee (EIOPC).
The efforts of the Financial Supervision Commission are directed exceptionally to achieving active and effective cooperation with the new Supervisory Authorities, dealing with elaboration of the Community legislative acts and the standards of their implementation, as well as to exchange useful information and experience with analogous to FSC institutions in the Member States.