The ESA consists of the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA). They were set up in London, Paris and Frankfurt after the financial crisis in 2008 to maintain a ‘single rule book’ of financial framework for the single market and to resolve disputes between national supervisors.

The EBA must now be relocated as it is currently situated in London so will need to move after Brexit, with many EU countries competing to host the authority.

The consultation document notes ‘the EBA will have to be relocated once the United Kingdom leaves the EU. While it is for the European Council to decide on the location of agencies, the UK’s decision to leave the EU provides an additional opportunity to reflect on the appropriateness of the current supervisory architecture.’

The European Commission wants to gather views on possible changes to the current legal framework to optimise the rules within which the ESAs operate to increase their ability when regulating.

The consultation focuses on the following issues:

• tasks and powers;
• governance;
• supervisory architecture; and
• funding.

It is necessary to review to ESAs to increase how effective the authorities are at providing governance and supervision as well as to ‘assess its effectiveness in the light of increasing complexity and interconnectedness of financial markets, and the need to ensure effective micro-prudential oversight to face the future challenges of the EU financial markets.’

Valdis Dombrovskis, vice-president responsible for Financial Stability, Financial Services and Capital Markets Union, said: ‘The EU needs to step up its efforts to build more integrated, efficient and stable financial markets so that it is equipped to deal with new challenges. Sound and efficient financial supervision is key to this goal.

‘In the six years following the crisis, the European Supervisory Authorities have carried out important work in developing a Single Rulebook for financial services. I want to hear from all stakeholders about how we can ensure that these Authorities have the most impact in supporting greater convergence of supervisory practices in our Member States.’

The consultation closes on the 16 May 2017.

Public consultation on the operations of the European Supervisory Authorities is available here.