The Role of European Supervisory Authorities in Consumer Protection Standard Setting on the Financial Services Market – Based on the Example of the European Banking Authority

Abstract

The purpose of the article is to present the genesis of the emergence and the scope of powers of the European Supervisory Authorities (ESAs) (the EBA, ESMA, and EIOPA), with particular reference to the EBA as regards the building of its supervisory normative standard and the protection of the consumer of financial services. The authors will propose de lege ferenda postulates which, in their view, would allow for an improvement in the quality of the financial services offered to consumers and ensure a higher level of protection of their interests and, at the same time, legal certainty for their providers. Increasingly sophisticated and complex financial products cause interpretation difficulties for both the courts and consumer protection authorities, but above all for consumers themselves, which consequently poses a challenge for both sides of the market (supply and demand). It is also a challenge for the post-crisis ESAs as the EU bodies not only designated to monitor and manage both the stability and security of the financial market, along with the actual level of consumer protection within it. In the preparation of the article, the legal-dogmatic and legal-theoretical method, which is standard for such studies, was applied, which allows for an analysis of the provisions of EU law and the identification of the norms stemming from them using interpretation and the assessment of the content of the provisions through the prism of the principle of consumer protection from Articles 12 and 169 TFEU and the EBAs’ competence provisions. Due to the fact that, in principle, the powers and competences of all three ESAs are analogous and only differ in terms of the scope of their application (i.e., financial institutions operating in the relevant financial market sectors – banking, insurance, and pension and investment), the authors will present their considerations with reference to the European Banking Authority (EBA), which is an exemplification of the powers of the other supervisory authorities. Thus, the secondary piece of EU legislation to be considered in this article will be the Council and European Parliament Regulation, hereinafter known as “EBA Regulation” and the actions taken by the EBA on that basis.