European system of financial supervision

What the EU is doing and why

The European System of Financial Supervision (ESFS) is the framework the EU uses to ensure that banks, insurance companies, pension providers and financial markets remain safe, fair and reliable. It was set up to help prevent future financial crises, protect consumers, and make sure financial rules are applied consistently across all EU countries. By bringing national supervisors together with EU-level bodies, the ESFS helps detect risks earlier and respond more effectively.

At the core of the ESFS are three European Supervisory Authorities (ESAs), which work closely with national supervisors. Each one focuses on a different part of the financial system

• the European Banking Authority (EBA) helps keep banks stable and trustworthy
• the European Securities and Markets Authority (ESMA) ensures that financial markets work in a fair, transparent and orderly way
• the European Insurance and Occupational Pensions Authority (EIOPA) oversees insurance companies and pension funds to protect policyholders and pension savers

The ESFS also includes the European Systemic Risk Board (ESRB), which monitors risks to the EU’s financial system as a whole. Its role is to identify early signs of instability and help prevent problems from spreading across sectors or countries.

Together, these bodies work to create a safer, more stable and more consistent financial system that supports citizens, businesses and the wider economy.

Questions and answers on the ESAs

As provided by the Regulations that established the ESAs, the three authorities must forward to the Commission any citizens’ questions that require interpretation of EU law. These Q&As are an important tool for achieving more supervisory convergence across the EU.

Relevant legislation