Abstract
Abstract Home country control has been a long-standing principle of supervisory governance in the internal market. However, in the wake of the financial crisis, the principle has come under stress. This chapter looks at ways to deal with home country control by putting forward for discussion a new paradigm which I will coin ‘home country control with consent’ (HCC-C). My aim is to examine the building blocks of HCC-C but also to reflect more generally on the merit of a (mostly horizontal) supervisory arrangement which allows other (host) actors to get involved in the decision making of a home state authority. To describe such involvement, I will use the term ‘interference’. The basic problematic that I seek to address is that of ensuring cooperation and trust between national competent authorities. To identify the building blocks of HCC-C, I will turn to the recently enacted European Market Infrastructure Regulation (EMIR) which provides a possible, even if embryonic, template for HCC-C.
Highlights
Home country control has been a long-standing principle of supervisory governance in the internal market
This paper looks at ways to deal with home country control by putting forward for discussion a new paradigm which I will coin ‘home country control with consent’ (HCC-C)
As the de Larosière report put it when looking at EU financial supervision in the wake of the financial crisis: ‘[i]n both cases a strong number of countries – including all new Member States for Solvency 2 and Member States unanimously in the case of the Capital Requirements Directive (CRD) – have decisively rejected changing the current balance of home and host state regulation’
Summary
Home country control has been a long-standing principle of supervisory governance in the internal market. Regulation (EMIR).[3] They concern inter alia the approval of Central Counterparties (CCPs) Under these rules, various actors get involved in the decision-making of one authority, that is the CCP’s competent authority which is, in essence, the CCP’s home authority.[4] This paper examines the new supervisory arrangements which EMIR enacts. 5 It is worth noting that unlike intervention-based supervision, HCC-C involves competent authorities, acting as authorities at Member State level as opposed to members of the European Securities and Markets Authority (ESMA), one of the three ESAs. 6 the Commission noted in relation to the supervision of the banking sector that it was ‘too fragmented to face current challenges’ and as such ‘not conducive to the necessary trust between Member States’ It concluded that there was a need for ‘political agreement on more and independent EU supervision’ (see European Commission, ‘Update - the banking union’ (MEMO/12/478, 22 June 2012)
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