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. Proposed structure for Banking
EBA – European
Banking AuthorityChairperson
Mgt Board
Executive
Director
ECA -
European
Court of
Auditors
OLAF – l’Office
européen de lutte
anti-fraude
European
Commission
€
Banking Stakeholder Group
Board of
Supervisors
9. Appeal processes
EU Court of
First Instance
Member State Member State
NSA NSA NSA
EU Court of
Justice
Board of Appeal for
3 ESAs
EU Council - QMV
EBA QMV
10. ESFS
ESFS - EU System of Financial
Supervisors
ESMA - European
Securities and
Markets Authority
EIOPA - European
Insurance and
Occupational
Pension Authority
EBA - European
Banking Authority
Joint Committee of European Supervisory Authorities
College of Supervisors
NSA
NSA
NSA – National
Supervisory
Authority
NSA
NSA
NSA
NSA
NSA
NSA
NSA
NSA
NSA
11. ESRB – EU Systemic Risk Board
ESRB – European
Systemic Risk Board
ECB
ESFS – European
System of Financial
Supervision
3rd Countries & Int’l
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).
15. Critics
Stop!
R e a l a r g u m e n t s
Sovereignty
Treasury
Global dimension
Exclusion and Dominance
16. Sovereignty of MS:
Critics
R e a l a r g u m e n t s
•Host states allowed to take steps if weaknesses are identified -
that can be abused for commercial or protectionist reasons
•ESAs empowered to override national regulators
•Changes give EU more powers. Emergency declared 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
•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, Switzerland and others are doing
Global cohesion:
18. Fiscal responsibilities of MS:
Critics
R e a l a r g u m e n t s
•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
•QMV to recognize the size and importance of financial
services relative to GDP
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.
20. Options/Scenarios
Approach Implications Effects
Yes we can “Political” arrangement
despite all the odds
Fast, “big bang” type of approach
Now, with the big stakes and big
appointments discussed
Yes but … Prolonged existence of the
current L3 non-mandatory
coordination
Prolonged existence of CAN DOs
and CAN’T DOs
Until next financial crisis
Is the money spent wisely?
Substitutes: colleges? ECB role?
New revised Commission’s
proposal?
Thank FESE – Federation of Euroepan Securities Exchanges – for inviting the Commission to talk about the XBRL – the Extensible Business Reporting Language. XBRL – a universal financial reporting framework adopted by several major jurisdictions in the World.
My name is Piotr Madziar and I represent the European Commission – Direction General Internal Market and Services. Despite the official invitation from your side I must recall that all that I say here is my personal opinion and can not be taken for the official of the European Commission.
Despite the fact that I have been asked to talk about the outcome of the consultation on the Review of the Accounting directives:
- The Council Directive of 25 July 1978 based on Article 54 (3) (g) of the Treaty on the annual accounts of certain types of companies (78/660/EEC). , and
- The Council Directive of 13 June 1983 based on the Article 54 (3) (g) of the Treaty on consolidated accounts (83/349/EEC),
in the XBRL aspect,
I decided to provide an overview of the Commission’s and other Institutions’ initiatives that, either explicitly or implicitly (potentially) identify XBRL and common business reporting format as means to deliver in several policy areas.
That includes in particular the recent prominent policy to regulate financial markets in the wake of the financial crisis, the European simplification and reduction of administrative burden program, a number of initiatives oriented ot restoration of confidence in the financial markets of the investors, citizens and institutions and, finally numerous measures to streamline the initiatives in the area of information society, ICT infrastructure and access to it.
Here my intention was to depict main EU policies driving the concept of harmonizing the business data and identifying XBRL as the only available, royalty-free, quality, global standard, notably the Simplification policy and the crisis-related measures.
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The Barroso Commission, on its outset, decided to provide a meaningful follow-up on the Simplification initiative (on the left), by targeting the 25% administrative burden reduction for businesses as one of the measures to deliver on the Lisbon 2000 agenda. A specialized HLG consisting of high profile individuals and chaired by Mr Stoiber was created by the Commission.
Also the MS used various opportunities to contribute to this initiative, providing policy initiatives and their expertise enriching the EU approach.
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The financial crisis, looming since early 2008, provided new challenges the EU institutions were expected to confront: the global and European supervisory structure, market transparency and confidence.
Other institutions made significant contributions towards forging a common view: the Council and the Parliament.
We received an initial input from the de Larosiere Group, and subsequently the G20 recommendations as regards the anti-crisis measures to follow.
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Other important policies also constitute important potential for XBRL use. Company disclosures, part of the corporate governance framework provide another vast opportunity for alignment between existing jurisdictions, frameworks and systems.
(click)
Last but not least, European institutions provide selective measures to boost European competitiveness by automation of business processes, harmonisation of standards and education, within the Lisbon agendas.
