Overview

A new EU financial supervisory structure is expected to be in place from January 2011, with three new European Supervisory Authorities, one for each of the banking, securities and insurance and occupational pensions sectors.

Each authority will have a much broader and deeper mandate for regulatory supervision than the existing supervisory committees, including important legislative and emergency oversight powers, and there will also be a new European Systemic Risk Board with responsibility for oversight of systemic risk issues.

This new framework represents a considerable shift in power from national regulators to the European centre, and will effectively create a two-tier system of financial regulation in the EU. Shearman & Sterling outlines the key points of note.