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Bowles: ESAs may be outsourced to member states after budget cuts

Tuesday 23 November 2010 - by Andrew Hickley

 Part of the role of the new European Supervisory Authorities is likely to be outsourced to national supervisors until the 2011 EU budget is passed, according to the European Parliament's Economic and Monetary Affairs Committee chair.

Speaking to GFS, Sharon Bowles MEP said that there was "a silver lining" to the news that ESAs will be forced to operate with just 60 per cent of their funds after EU Budget talks collapsed earlier this month, failing to reach an agreement.

Bowles says that the ESAs will not be able to afford to recruit staff until later than originally planned - potentially July 2011 - and in the meantime, they will be forced to rely on national supervisors.

She says: "In a sense, some of their stuff will have to be outsourced and that's not a situation with which the UK would be terribly disappointed.

"The UK and many other member states and indeed member states' supervisors want a little bit more of a coordination role, whereby actually what happens at the supervisory authority is that it says member state X, can we delegate this to you, and member state Y can we delegate this to you - making use of where there is that appropriate expertise.

"And guess what, who has got most of the appropriate expertise? As they say, every cloud has a silver lining."



Bowles also praises the impact that British supervisors and regulators have had on areas such as the Alternative Investment Managers Directive.

Referring to comments made at a CEIOPS conference last week, where she argued that bank classification rules could lead to an "apartheid" developing between internationally and European based banks, she says that the global reach of businesses operating in the City has allowed British supervisors to "instinctively" deal better with international matters.

"Things are always done a bit short-sighted or not looking internationally enough, and guess what, it's always the Brits saying 'Hang on a minute, what about the international scene?'"

She claims that "the logic in the sense of our arguments actually prevails at the end".

"You get a lot of people saying 'oh there go the Brits again', then they actually go and look at it and say 'whoops, there we go, we have to fix it again'".

She points to the AIFM directive as an example of this, believing statements like "prison Europe, fortress Europe" helped draw attention to a situation where "the money couldn't get in and the money couldn't get out".

But she is confident a resolution to the potential "apartheid" issue will be found.

"It'll all come out in the wash, because you'll have people like me rattling the cages," she says.


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