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UK Treasury MPs ‘confused’ over ESAs

Thursday 16 December 2010 – by Will Henley

An influential member of the European Parliament’s Economic and Monetary Affairs Committee has written to UK MPs to clear up their “confusion” over the powers of new European Supervisory Agencies.

In a letter from MEP Peter Skinner’s office seen by GFS News, the UK Labour Party finance spokesman in Brussels seeks to reassure Treasury Select Committee members that ESAs – scheduled to begin operations next month – will not have “discretionary power” to overrule national authorities.

“We are of the view that there is general misunderstanding about the powers of the ESAs,” reads a note from the MEPs office.

“Their powers having been wildly exaggerated by both their supporters and detractors.”

The letter from Skinner’s office – who was closely involved with negotiations to establish the ESAs – was drawn up “in response to some confusion among UK MPs” following European EU Commissioner Michel Barnier’s appearance at the committee on Monday, according to the covering note.

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“I think it is important to clarify the exact powers of the ESAs, and to spell these out through some specific examples, since perhaps the Commissoner did not directly address these points yesterday,” the letter reads.

“The ESA can only overrule a national authority if that national authority is not following EU law – which all member states have already negotiated and signed up to.”

Claiming that there are a “number of safety-mechanisms” built in to protect member states, the letter goes on to note that ESAs have no powers to intervene where legislation – such as Solvency II, CRD III, AIFMD – grants discretionary power to national authorities.

The ESAs include the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority.

Skinner has been a member of the Econ committee for 13 years and chairs the European Parliamentary Insurance Caucus and the European Parliamentary Financial Services Forum.

During Barnier’s appearance on Monday, the Commissioner responsible for the internal market and services revealed that the European Commission has received in excess of 300 applications for each of the ESA chair posts.

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