Sven Giegold
Mitglied der Grünen/EFA-Fraktion im Europaparlament

Sprecher Europagruppe Grüne
„Kommt, wir bauen das neue Europa!“

European financial supervision needs more punch, consumer protection and sustainability

MEPs have recently tabled their amendments to revise the three European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). On the basis of these proposals, MEPs will negotiate and vote on the European Parliament’s compromise, which will then serve as Parliament’s negotiating position in negotiations with the Council and the EU-Commission. The amendments reflect the positions of the different political groups. The timetable for the legislative process is tight, because it must be completed before the end of the legislative period in May 2019 in order to avoid a reopening after the European elections. Following Burkhard Balz’s move to the Bundesbank, MEP Othmar Karas will take over the co-rapporteurship for the Christian Democrats (EPP).

 

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group and shadow rapporteur commented:

“We must now be ambitous for a joint and effective supervision of the European financial markets. For a genuine Capital Markets Union, European financial supervision finally needs more competences and resources in the area of consumer protection.

The governance of the three European supervisors should urgently be strengthened by an independent Executive Board in order to reduce the blocking possibilities of national supervisors. Until now, national supervisors have regularly been able to hinder decisions at the European level. As a result, many of the legislative competencies of EU financial watchdogs have hardly been used. Together with the Social Democrats (S&D), the Left (GUE/NGL) and the Liberals (ALDE), we Greens have tabled proposals to strengthen the European supervisors’ capacity to act. At the same time, we Greens call for a strong anchoring of the principle of proportionality in order to reduce red tape in financial market regulation, especially for small and solid companies.

With his rejection of any strengthening of the European governance, the outgoing co-rapporteur Burkhard Balz (CDU) has unfortunately positioned himself against a genuine Capital Markets Union. It is now up to the new co-rapporteur of the Christian Democrats, Othmar Karas, to correct the position of the Christian Democrats in the sense of a pro-European compromise. The reforms urgently needed for the European financial markets must not be thwarted by national fence-sitting.

Together with the Christian Democrats (EPP), we have suggested a greater independence of the European Systemic Risk Board (ESRB). For too long, macroprudential warnings have not been taken seriously, with significant risks to financial stability. Ten years after the peak of the crisis, the financial system has become even more bloated than before. Only by becoming more independent from the European Central Bank the ESRB can credibly perform its tasks in macro-prudential supervision. Macroprudential risks should in future be addressed more effectively by an ESRB with an independent chairperson.

We Greens call in our amendments for the ESAs to be allowed to carry out covert test-purchases (so-called mystery shopping) in the future in order to check across borders whether financial businesses really protect consumers. Contact points for whistleblowers who wish to provide information about possible breaches of the law will be given more visibility and access. In their stress tests of financial institutions, financial supervisors will in future also have to take into account climate risks that threaten our financial system with accelerating climate change. In view of the numerous cases of serious failure of national supervisors in the fight against money laundering, we call for strong powers for European financial supervision in this regard.”

 

Green key demands

  • Strengthening the governance of the ESAs with an independent Executive Board
  • Strengthening the mandate in the areas of consumer protection and sustainability risks
  • Mandate for mystery shopping for more effective consumer protection
  • Chairman of the ESRB independent of the ECB
  • Set up visible and easily accessible contact points for whistleblowers
  • Mandate to establish coordination platforms for different national supervisors supervising financial firms who offer their services across borders.
  • Mandate for the fight against money laundering
  • More transparency and accountability to the European Parliament
  • Carbon stress tests to analyse climate risks for the financial system
  • Set up a central database for reporting data and consumer complaints
  • More resources for consumer protection and sustainability tasks

 

Links to the draft report:

Regulations:

http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE625.358

Directives:

http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE625.359

ESRB:

http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE625.360

 

Links to all Green amendments:

https://sven-giegold.de/wp-content/uploads/2018/09/1162464XM.docx

https://sven-giegold.de/wp-content/uploads/2018/09/1162465EN.docx

https://sven-giegold.de/wp-content/uploads/2018/09/1162463XM_ESAs_recitals.docx

https://sven-giegold.de/wp-content/uploads/2018/09/1161772EN_MiFIDSolvency-II.docx

https://sven-giegold.de/wp-content/uploads/2018/09/1161774XM_AM_ESRB.docx