Review of the Lamfalussy Process: a success to be further improved

The European Banking Federation (EBF) welcomes the Ecofin Council’s conclusions on the Lamfalussy Process review and commends the substantial benefits to supervisory cooperation and convergence brought about by the Process over the last five years. It stresses that further success now depends on the Process’ capacity to deliver consistent and convergent implementation and application of adopted EU legislation.

The EBF therefore encourages the Council to pay special attention to key areas when going forward:
- Policy initiatives aimed at significantly reducing "goldplating", i.e. the introduction of national provisions to legislation other than those needed to transpose the EU text into local law. They generate significant obstacles to the proper functioning of the Lamfalussy Process and undermine the efforts to create a Single Market.
- The choice of legal instruments, which should not override the consistent implementation of EU measures across Member States; the preference for a directive or regulation should be determined on a case-by-case basis; it should be based for example on the degree to which the rules are technical in nature or on whether there is a risk that a deviation of the key elements may undermine the intended outcome.

Furthermore, contributions of the Level 3 Committees to consistent implementation and converging supervisory practices keep increasing. They need to be matched by adequate competences. The mandates of the Committees should more clearly set out and align their roles and tasks. Explicit mention of the role of the responsible Committee in relevant EU legislation should also be made, as it was for CEIOPS in the proposal for a revised solvency regime for the insurance industry.

In addition, the Level 3 Committees need to receive a clear mandate endorsed by the three key EU institutions, indicating the main objectives expected from them for the period ahead. The Committees should then regularly report on and explain their achievements and failures to the EU institutions.

The EBF supports commitment to more effective decision-making in the Level 3 Committees; introducing majority voting could be a step in that direction, but the exact
underlying procedure should be for the Committees to decide on.

The EBF acknowledges that clarification of roles and responsibilities between home and host supervisors of cross-border financial groups is urgently needed. It however stresses that this should not be done at the expense of cross-sector consistency and coherence.

The ongoing discussions on the Solvency II proposal must in that sense be duly taken into account when considering the issue for the banking and securities sectors.

Set up in 1960, the European Banking Federation (EBF) is the voice of the European banking sector. It represents the interests of over 5000 European banks, large and small, from 29 national Banking Associations, with assets of more than EUR 20,000 billion and over 2.3 million employees.