The proposal calls for European supervisors to have rights to come forward and resolve disputes if national regulators do not agree on the monitoring of multinational financial institutions, who operate across the Europe.
The proposed Council with a single set of rules will operate across the European Union (EU) and will be led by European Central Bank’s president. It will have national central banks as members and a selected vice chairman from one of the 11 EU countries, including Britain that do not use the Euro, the common currency of EU.
The members of the European Systemic Risk Council will monitor and coordinate the work of the national regulators, who supervise banking, insurance and pensions, and securities. This body can issue risk warnings and monitor the follow-up. However, it will not have any legally binding powers.
The draft document published by the European Commission said: “If the national authorities disagree over an institution, the European bodies should try to broker the agreement. If, after a phase of conciliation, there is no agreement, the European System of Financial Supervisors should, through a decision, settle the matter. If they detect a deliberate breach of European law, the proposal would also give the European Union power to force countries to come into line by adopting decisions directly applicable to the institutions.”