European supervisory convergence: a new dynamic
| Published date | 01 October 2006 |
| Date | 01 October 2006 |
| DOI | https://doi.org/10.1108/13581980610711126 |
| Pages | 348-362 |
| Author | Michael McKee |
| Subject Matter | Accounting & finance |
FEATURE ARTICLE
European supervisory
convergence: a new dynamic
Michael McKee
British Bankers Association, Kent, UK
Abstract
Purpose – To describe the 5th May 2006 ECOFIN conclusions on supervisory convergence and
explain why they represent a new departure for European financial services work.
Design/methodology/approach – The article outlines the 6th 2006 ECOFIN conclusions relating to
supervisory convergence. It then reviews EU developments relating to supervisory convergence from
the 2001 Lamfalussy Process onwards as context for the conclusions. Finally, in the light of the review
and the description of the conclusions it draws some conclusions about the likely implications for
further developments in the EU in relation to EU supervisory convergence.
Findings – The principal findings are that supervisory convergence is likely to increase due to
enhanced political backing with member state finance ministries and regulators taking a leading role.
Research limitations/implications – As this is the first paper on the ECOFIN conclusions there is
considerable scope for ongoing research to establish the extent to which the predictions in the paper
prove to be justified by future developments.
Practical implications – The ECOFIN conclusions represent a departure from EU financial
services work focused on a legislative programme, the Financial Services Action Plan, to a
programme focusing on improving cross-border relationships between supervisors. This has
important implications for the key European actors and gives a strong role to national finance
ministries and supervisors. The practical implications will be enhanced cooperation between
national supervisors on a cross-border basis. The paper argues for strong financial services
industry involvement in this.
Originality/value – The value of the paper is twofold – Its primary value is as the first academic
analysis of the ECOFIN conclusions and as a predictor of their likely influence on EU institutional
balance in the financial services area. Secondly it is a useful review of the main developments with
regard to EU supervisory convergence over the five years 2001-2006 – something which, to be the best
of my knowledge, has not previously been carried out in the academic literature.
Keywords Economic convergence,Financial services, Europe
Paper type Technical paper
On 5th May 2006 the Finance Ministers of the European Council (ECOFIN) adopted
conclusions on financial supervision, on the regulatory framework for cross-border
mergers and acquisitions in the financial services industry and on the Commission’s
white paper on financial services policy for the 2005-2010 period[1] The Committee of
European Securities Regulators (CESR) immediately issued a press release welcoming
the conclusions and describing them as:
...an important political step forward by EU Member States, following on from the adoption
of the Stockholm Resolution which introduced the ‘Lamfalussy’ legislative approach for
financial services in March 2001 and established CESR[2].
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
JFRC
14,4
348
Journal of Financial Regulation and
Compliance
Vol. 14 No. 4, 2006
pp. 348-362
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980610711126
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