(Reuters) - Three European Union financial watchdogs warned that a funding freeze will hamper their efforts to help Europe avoid another financial crisis.
The 2007-2009 crisis led to new laws that force banks to hold more capital so that taxpayers do not have to rescue them again. Insurers also face tougher capital requirements, while the EU has also agreed to set up new protections for investors.
Three EU watchdogs are responsible for writing the rules to apply and enforce these new laws. Andrea Enria, chairman of the European Banking Authority, said on Tuesday there was a growing disconnect between the rising level of rule-making and the EBA's lack of resources.
"We are really struggling," Enria told the European Parliament's economic affairs committee, one of the major EU bodies that approved laws now being fleshed out by regulators.
The EU's executive European Commission is proposing to freeze EBA's budget for 2015 at around 33.6 million euros, a move Enria said would make it difficult to deliver on its allotted work.
"It is becoming an issue of survival and seriousness in completing our tasks. We have exhausted all possible creative solutions on our side," Enria said.
The EBA will be forced to decide which tasks to complete or to postpone, he told the committee. Regulators have come under pressure to step up their activity after supervisors across the world failed to spot the build-up to the crisis.
Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA), said the watchdog will not meet some of its legal obligations in supervision, in analyzing market risks or in collecting data as it prioritizes rule-making.
The commission has proposed a budget of 33.3 million euros for ESMA in 2015, compared with a request from the watchdog for 38.6 million euros and 14 new posts.
This year it received 33.2 million euros.
"With the current resources, we cannot meet the deadlines in the legislation," Maijoor told the committee. The regulators are funded partly by the European Union and partly by national regulatory bodies, which are strapped for cash themselves.
Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA), told the committee his agency faced a 10 percent budget cut next year. "Are we serious? We need to have courage," Bernardino said.
reuters.com
The 2007-2009 crisis led to new laws that force banks to hold more capital so that taxpayers do not have to rescue them again. Insurers also face tougher capital requirements, while the EU has also agreed to set up new protections for investors.
Three EU watchdogs are responsible for writing the rules to apply and enforce these new laws. Andrea Enria, chairman of the European Banking Authority, said on Tuesday there was a growing disconnect between the rising level of rule-making and the EBA's lack of resources.
"We are really struggling," Enria told the European Parliament's economic affairs committee, one of the major EU bodies that approved laws now being fleshed out by regulators.
The EU's executive European Commission is proposing to freeze EBA's budget for 2015 at around 33.6 million euros, a move Enria said would make it difficult to deliver on its allotted work.
"It is becoming an issue of survival and seriousness in completing our tasks. We have exhausted all possible creative solutions on our side," Enria said.
The EBA will be forced to decide which tasks to complete or to postpone, he told the committee. Regulators have come under pressure to step up their activity after supervisors across the world failed to spot the build-up to the crisis.
Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA), said the watchdog will not meet some of its legal obligations in supervision, in analyzing market risks or in collecting data as it prioritizes rule-making.
The commission has proposed a budget of 33.3 million euros for ESMA in 2015, compared with a request from the watchdog for 38.6 million euros and 14 new posts.
This year it received 33.2 million euros.
"With the current resources, we cannot meet the deadlines in the legislation," Maijoor told the committee. The regulators are funded partly by the European Union and partly by national regulatory bodies, which are strapped for cash themselves.
Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA), told the committee his agency faced a 10 percent budget cut next year. "Are we serious? We need to have courage," Bernardino said.
reuters.com
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