The Push for Supervisory Independence in EU Financial Markets | Nathalie Piscione

Published (in revised form) on 11th October 2024 for the Journal of Financial Supervisors Academy Volume I.

Supervisory independence - the ability of financial regulators to make decisions free from political interference, industry pressure, and conflicts of interest - is widely recognised as a cornerstone of effective financial oversight. Yet ensuring it in practice has proven more complex than simply legislating for it.

Following the 2019 review of the European Supervisory Authorities (ESAs) regulation, the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and  European Insurance and Occupational Pensions Authority (EIOPA) were formally tasked with fostering and monitoring the supervisory independence of National Competent Authorities (NCAs) across the EU. A 2021 stock-take exercise revealed that independence is multi-faceted, shaped not only by legal frameworks but by how authorities operate on a daily basis. 

In October 2023, the three ESAs published joint criteria on supervisory independence, building on international standards from bodies such as International Organization of Securities Commissions (IOSCO) and the Federation of Small Businesses (FSB). Organised around four pillars - operational, financial, and personal independence, alongside accountability and transparency - the criteria is non-binding but intended to serve as a practical benchmark for NCAs and as a tool for the ESAs in their ongoing assessments.

In this article, Nathalie Piscione, Senior Legal and Policy Officer at ESMA, outlines the methodology behind the criteria and highlights those that go beyond existing international standards. These include requirements around the appointment and selection process for governing body members, the management of real, potential, and perceived conflicts of interest, and obligations around transparency. This includes the external delegation of supervisory tasks and publication of key documents in English.

The article also sets out the next steps, including EBA guidelines on conflicts of interest mandated under the revised Capital Requirements Directive, and the prospect of a formal ESA assessment of NCAs against the joint criteria. 

This summary is part of a weekly series curated by Business News Malta, showcasing articles from the Journal of Financial Supervisors Academy (JFSA) Volume I, published September 2025.