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European System of Financial Supervision (ESFS)

The European System of Financial Supervision (ESFS) consists of the three European Supervisory Authorities (ESAs), the European Systemic Risk Board (ESRB) and national supervisory authorities. Its main task is to ensure consistent and appropriate financial supervision throughout the European Union (EU). The ESFS covers both macro-prudential and micro-prudential supervision.

European Systemic Risk Board (ESRB)

The European Systemic Risk Board (ESRB) is responsible for the macro-prudential supervision of the EU financial system.

Its main tasks include:  

  • collecting and analysing information for the detection of systemic risks;
  • adopting recommendations on measures intended to address identified risks;
  • cooperating and coordinating with European supervisory authorities and international forums.

European Supervisory Authorities

The European Supervisory Authorities are:

  • the European Banking Authority (EBA);
  • the European Insurance and Occupational Pensions Authority (EIOPA); and
  • the European Securities and Markets Authority (ESMA).

The tasks of the European Supervisory Authorities focus on harmonising financial supervision in the EU through the development of a single rulebook on financial institutions. Moreover, these authorities assess any risks and vulnerabilities of the financial sector.

The above three authorities participate in a Joint Committee in order to ensure cross-sectoral consistency in the financial system and to adopt joint positions in the area of supervision of financial conglomerates.

European Banking Authority (EBA)

The European Banking Authority (EBA) works to ensure effective prudential regulation and supervision across the European banking sector in order to maintain financial stability in the EU and to safeguard the orderly functioning of the banking sector.

The EBA is mandated to establish, through the adoption of binding technical standards and guidelines, a European single rulebook in banking sector that will contribute to a level playing field and provide high protection to depositors, investors and consumers.

Moreover, it is mandated to assess risks and vulnerabilities in the EU banking sector by providing regular risk assessment reports and performing EU-wide stress tests.
The EBA is also entrusted with other tasks, such as investigating insufficient application of EU law by national authorities and acting as an independent advisory body to the European Parliament, the Council or the Commission.

European Insurance and Occupational Pensions Authority (EIOPA)

The tasks of the European Insurance and Occupational Pensions Authority (EIOPA) include the prevention of risks to the stability of the insurance sector. The Authority is mandated to safeguard the stability of insurance markets and the protection of policyholders and pension scheme members.

European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority (ESMA) is an independent EU authority, whose objective is to enhance the protection of investors and promote the stable and orderly functioning of financial markets.

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