Concrete steps to EU financial oversight 

"The financial crisis exposed dangerous weaknesses in the regulatory and oversight structure that need to be urgently corrected to restore confidence in the financial system and to keep the single market alive," Lannoo asserts. 

During a financial crisis, a "clear hierarchy in the decision-making structure, up-to-date supervisory information and competence to act" are of critical importance, his report argues. As events demonstrated, "these conditions are not in place in the EU today," it claims. 

To overcome this, the report calls for the creation of a 'European System of Financial Supervisors (ESFS)'. Under such a system, "EU supervisors would work under a single umbrella, a single institutional structure, on the basis of harmonised principles and statutes," states Lannoo. 

The report thus makes three recommendations: 

i) The European Council should formally mandate the high-level expert group on EU financial supervision to develop an optimal structure for financial oversight and propose concrete steps leading to the ESFS; 

ii) A 'European Financial Institute' should be created to lay the groundwork for the establishment of the ESFS; and 

iii) The ESFS should be given a definitive target date to begin operations. 

The ESFS would be based on the "subsidiarity principle," the author maintains, explaining that only those tasks that can be better performed at European level would be centralised, citing "crisis management, data-sharing and macro-prudential oversight" among these. 

To restore confidence in the financial system, "these moves should be widely communicated to European citizens," Lannoo concludes.