2.5.1 Current situation

As can be concluded from the subsections above, the home competent authority has the exclusive power to supervise the financial institutions. The competent authorities in the other Member States where the financial institution seeks listing or offering its securities are host competent authorities with very limited powers.

While the regulatory framework and the requirements for financial institutions have been harmonised considerably by Directives adopted on the basis of the Lamfalussy-structure in the past decade, there is no EU-wide financial supervision system. In fact, the pre-crisis EU financial regulation simply allocated supervisory jurisdiction: the home-Member-State-based model.1 The advisory powers of the Committees and the various duties of competent authorities to co-operate enacted in the Directives and adopted on the basis of the Lamfalussy-structure, do not create a solid EU financial supervision structure. There is no mechanism onder the current framework to force home competent authorities to take action against cross-border operating financial institutions that violate the requirements applicable to them. Furthermore, it is not possible for an EU-wide institution to force national supervisors to agree in a consistent and effective supervision of financial institutions operating cross-border.