2.5.0 Introductie

The 2008 financial crisis made clear the shortcomings in the European structure of financial supervision. In the current system of financial supervision, the financial supervisor of the home Member State has, in principle, the exclusive authority to supervise financial institutions even if the institution operates across borders. If the home financial supervisor does not effectively supervise the financial institutions, this failure could affect clients and creditors in other Member States. The bankruptcy of Icelandic banks affected accountholders in the United Kingdom and the Netherlands. The shortcomings in the Icelandic Deposit Guarantee scheme1 threatened to expose these depositors to losses on their savings that should have been covered by that scheme. In the end, the UK and the Dutch government guaranteed these deposits under the applicable deposit-guarantee scheme. However, the problems arising from the execution of the agreement concluded between the UK, Dutch and Icelandic government to recover the UK and Dutch taxpayers' money from Iceland showed the consequences of failure in local supervision. This subsection gives an outline how the European Union seeks to ensure consistent application by the different national supervisors of the rules laid down in the Prospectus Directive 2003.

In order to solve the shortcomings in the European structure of financial supervision, the European legislator adopted legislation that creates a European System of Financial Supervisors ("ESFS") consisting of national supervisors and three new supranational European Supervisory Authorities ("ESAs"). A Supervisory Authority for the banking sector,2 one for the insurance and pensions sector3 and a European Supervisory Authority to ensure compliance by financial institutions with conduct of business rules, among others the prospectus rules, and the orderly functioning of the securities market.4 The national financial supervisors remain the principal supervisory authorities. However, the supranational authorities will get decisive authority in the case of an emergency or continued non-agreement between national supervisors. In these cases, the supranational authorities will have the authority to directly address financial institutions that do not comply with the European financial services and financial supervision legislation.

Paragraph 1 contains a brief overview of the current structure of financial supervision. In paragraph 2, the de Larosière-report on the financial crisis and the present shortcomings in European financial supervision will be dealt with. Paragraph 3 provides a brief overview of the reaction of the European Commission to this report. Paragraph 4 describes the proposals of the European Commission. Paragraph 5 discusses the (proposed) future powers of the European Securities and Markets Authority to ensure compliance with the European rules on the prospectus and financial reporting. In paragraph 6, the proposed amendments of the European Parliament Committee on Economie and Monetary Affairs and the legislation finally adopted will be discussed. In paragraph 7, some concluding remarks are provided.