European Financial System governance

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Much has been achieved in upgrading and integrating the ‘governance’ of the European financial system in recent years. In parallel with the successful adoption of the Financial Services Action Plan (FSAP), the EU managed to reform its regulatory structure, extending what was proposed by the Lamfalussy Committee for securities markets in early 2001 to banking and insurance. This paper by CEPS Chief Executive Karel Lannoo explores what remains to be done. He first asks whether the current decentralised governance structure, which offers some advantages but creates unsound asymmetries, is here to stay, and he then identifies several concepts that have are now in wide circulating but which he argues require further clarification to avoid confusion and to consolidate the progress achieved.