Capital Markets Union: Political agreement on a stronger and more integrated European supervisory architecture, including on anti-money laundering - Main contents

The Commission welcomes the political agreement reached by the European Parliament and Member States on the core elements of the reform of the European supervision in the areas of EU financial markets including when it comes to anti-money laundering.

This is an important step to achieve the Capital Markets Union's objective to ensure stronger, safer and more integrated financial markets to the benefit of European consumers, investors and businesses.

Today's agreement will improve supervision in the European Union by reinforcing the role and powers of the European Supervisory Agencies (ESAs). To ensure a fully functioning and operating Capital Markets Union (CMU) the EU needs to ensure that supervision keeps pace with further integration. Moreover, recent cases involving money laundering in EU banks have increased the need to strengthen the supervisory framework in the area of anti-money laundering. The agreed package will contribute to promoting the integrity of the EU's financial system, ensuring financial stability and protection from financial crime.

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “This is an important step towards our goal to have not only a Single Rulebook, but also a consistent supervisory approach across the EU. The European Supervisory Authorities play a key role in achieving convergence of supervisory outcomes to ensure a level playing field for financial institutions and investors in the EU. This is a precondition for a fully-fledged Capital Markets Union. The new rules will also confer new powers to the European Banking Authority in anti-money laundering supervision of the financial sector to prevent cases like the recent scandals on money laundering from happening again."

Jyrki Katainen, Vice-President for Jobs, Growth, Investment and Competitiveness said: "The European Supervisory Authorities play a key role in preserving orderly markets, financial stability and ensuring investor and consumer protection. The agreement strengthens them and reinforces their powers. The work of the European Supervisory Authorities contributes to improving the business environment in Member States. Financial integration generates jobs, growth and investments in Europe and strengthens the Economic and Monetary Union".

Commissioner for Justice, Gender Equality and Consumers, Vĕra Jourová, said: "We have strong rules against money laundering in the EU, but recent scandals in European banks showed gaps in supervision. Today's agreement will equip the supervisors with efficient tools to better prevent any money laundering risks and act swiftly when there is a weakness in one country. The new rules will ensure that there is no weak link in the EU, when it comes to money laundering and terrorist financing.”

Next steps:

This political agreement will be followed by further technical work so that the European Parliament and the Council and can formally adopt the final texts.

Background:

The European System of Financial Supervisions consists of:

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  The three European Supervisory Authorities (ESAs) - the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) - which supervise and provide regulatory guidance for individual sectors and institutions;
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  The European Systemic Risk Board (ESRB), which oversees the financial system as a whole and coordinates EU policies for financial stability.

In September 2017, the Commission put forward proposals to reinforce the coordination role of the European Supervisory Authorities as well as some targeted amendments of the European Systemic Risk Board (ESRB) to ensure the effective monitoring of financial stability risks. The proposal was amended in September 2018 to strengthen the supervisory framework in the area of anti-money laundering and terrorist financing.

The ESAs contribute to developing a unified set of rules for EU financial markets (the 'Single Rulebook'). They also help to foster supervisory convergence among supervisory authorities, and to enhance consumer and investor protection. The new legislation improves the governance and the convergence powers of the ESAs. It also strengthens the capacity of the ESAs to promote and ensures consistent supervision and uniform enforcement of the law in the EU.

The new rules will also address anti-money laundering, as powers related to the prevention and mitigation of risks of money laundering in the financial sector will be centralised at the European Banking Authority (EBA). The new legal framework furthermore aims at strengthening EBA's mandate for collecting, analysing and further disseminating information to ensure that all relevant authorities effectively and consistently supervise the risks of money-laundering and that they cooperate and share information. The EBA's power to act where Union law is breached has also been clarified and enhanced, so as to guarantee that action can be taken immediately when anti-money laundering rules are broken at national level.

The agreement will also strengthen the effectiveness of the European Systemic Risk Board (ESRB) in overseeing the financial system and detecting risks to financial stability. Since its creation in 2010, the ESRB has made a significant contribution to the development of macro-prudential policy in the EU and systemic risk analysis. Today's agreement maintains the main characteristic of the ESRB, but introduces a number of targeted provisions that will further improve its functioning.

IP/19/1655