European Financial Supervision after the Crisis: Multi-Speed Models within a Two-Track Framework

The setting up of the European System of Financial Supervision (ESFS) and of the European Banking Union (EBU) had a tremendous impact on EU financial governance. The division of supervisory competences between national competent authorities (NCAs) and European ones – both of the ESFS and the EBU – vary not only according to the currency adopted (Euro or non Euro), or the financial market concerned (banking, securities or insurance), but also because of the existence of emergency situations, the size of a financial institution (significant or non significant banking institution), and the specific matter concerned (money laundering and consumer protection fall out of the scope of the EBU; the ESMA has been given direct supervisory powers in areas such as Credit Rating Agencies (CRAs) and derivatives). These different supervisory models vary in the degree of integration, as well as in the type of independence and the accountability of the regulators. This variety of supervisory models is generally the result of political compromises. It shows that in the aftermath of the crisis differentiation is increasing in the EU, but, at least in the financial area, at the expenses of regulatory efficiency