New architecture regulatory and supervisory design of the European Union: Macro and micro prudential approach

Lessons learned from the large-scale financial crisis and the perceived weaknesses in the existing EU supervisory framework, initiated a reform and building up of a new architecture design for oversight functions, by the competent EU institutions, focusing on the concept of systemic risk. EU Commission mandated a High Level Group chaired by Mr. Jacques de Larosiere to propose recommendations to the Commission on how to strengthen European supervisory arranagements. The new supervisory framework of the new architecture that began to be implemented from 1 January 2011is based on two pillars of control: The European Systemic Risk Board - ESRB, which is responsible for macro-prudential surveillance, early detection and risk assessment and taking of remedial measures in the form of recommendations and warnings in limiting and mitigating the effects of systemic risks, and the European System of Financial Supervisors - ESFS, which is responsible for the microprudential supervision of the three microsupervisory authorities, the Joint Committee and national supervisors, with the ambition to build a strong, coherent system of surveillance networks, contribute to the devlopment of uniform rules, a single 'Handbook', and strengthen the cross-border cooperation with the College of Supervisors, and other tasks within its legal jurisdiction.