European System of Financial Supervision (ESFS)

The European System of Financial Supervision (ESFS) consists of three European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). The ESFS is a multilayered system of micro- and macroprudential bodies whose goal is to ensure consistent and coherent financial supervision within the EU.

European Supervisory Authorities (ESAs)

The European Supervisory Authorities (ESAs) are three supranational bodies: the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Banking Authority (EBA).

The main task of these bodies is to ensure consistent and appropriate microprudential supervision of the financial markets in the EU, in cooperation with the national supervisory bodies of Member States. While most supervisory activities of financial institutions fall under the jurisdiction of national supervisory bodies, the ESAs are assigned to develop and implement a regulatory framework and convergent supervisory practice within the EU, in addition to exercising certain direct supervisory powers, both individually on the level of the area within the purview of an individual European Supervisory Authority, and in connection to establishing common supervisory standards and consistent supervisory practice. The ESAs occupy a significant role in advising EU bodies, especially the Council and the Commission, in the legislative process, the development of regulatory standards and coordination of the actions of national supervisory bodies. 

The goal of the ESAs is the promotion of cross-border supervisory cooperation, ensuring consistency of supervisory practices, reducing unfair market competition and promoting equal conditions for market competition, and increasing the protection of investors and users of financial services. In addition, these authorities develop various technical advice for the Commission and guidelines and recommendations for national supervisory authorities. 

Supervisory and regulatory issues of intersectoral importance are resolved through the ESAs Joint Committee, which involves representatives of national supervisory authorities. 

The Board and employees of Hanfa actively participate in management bodies and numerous groups assigned with the preparation of regulatory and supervisory initiatives within the activities of ESMA and EIOPA.

Ante Žigman, the President of the Board of Hanfa, is a member of EIOPA’s Mediation Panel and the Executive Committee of the International Association of Insurance Supervisors (IAIS) as the Representative of the Central and Eastern Europe and the Transcaucasian (CEET) region, and actively takes part in the work of these  international bodies.

ESMA is an independent EU body aimed at improving the protection of investors and promoting stable and orderly financial markets.

ESMA has three goals:

  • investor protection – ensuring that the needs of users of financial products are met in a more adequate manner, strengthening their rights as investors and confirming their responsibilities
  • orderly markets – promotion of integrity, transparency, effectiveness and proper functioning of financial markets and strong market infrastructure
  • financial stability – strengthening the financial system to withstand shocks and consequences of financial imbalances, and encouraging economic growth.

ESMA is responsible for coordinating measures taken by regulators of securities and the adoption of contingency measures in crisis situations.

Even though ESMA is an independent body, it is accountable to European institutions, including the European Parliament; and at its request for official hearings, it appears before the Committee on Economic and Monetary Affairs (ECON), the Council of the European Union and the European Commission. ESMA regularly reports on its activities to these institutions at meetings and through its annual report.

EIOPA is a part of the European System of Financial Supervision (ESFS). It is an independent advisory body of the European Commission, the European Parliament and the Council of the European Union.

The mission of EIOPA is to protect the public interest by contributing to short-term, medium-term and long-term stability and effectiveness of the financial system for the Union's economy, its citizens and businesses. This mission is pursued by promoting a sound regulatory framework and consistent supervisory practices in order to protect the rights of the policyholders, pension scheme members and beneficiaries and contribute to the public confidence in the EU’s insurance and occupational pensions sectors.

The EBA is an independent EU body whose job is to ensure an effective and consistent level of prudential regulation and supervision of the European banking system. Its main goals are the maintenance of financial stability in the EU and ensuring the integrity, efficiency and orderly functioning of the banking sector.

The main task of the EBA is to contribute, through the adoption of binding Technical Standards and Guidelines, to the creation of the European Single Rulebook in banking. The Single Rulebook aims at providing a single set of harmonised prudential rules for financial institutions throughout the EU, helping create a level playing field and providing high protection to depositors, investors and consumers.

The ESRB is responsible for the macroprudential supervision of the financial system. The Board assesses the macroeconomic risks from the perspective of the entire EU financial sector, and includes representatives of national central banks and supervisory bodies of EU Member States.


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