One effect of establishing the Banking Union was to consolidate the sector-based model of supervision in the euro area, because the ECB cannot be assigned prudential powers in the insurance sector. As a result, the ECB has specialised prudential powers that apply solely to the banking sector. Conversely, national supervisory authorities have been able to adopt a more global approach, typically covering the entire financial sector: of the 19 national authorities represented on the ECB Supervisory Board, 15 have powers that extend to the insurance sector as well.
The vertical nature of ECB supervision is further enhanced by the fact that two major areas of supervision fall under national jurisdiction: customer protection and AML/CFT, which remain under the jurisdiction of Member States and are key areas in effective overall supervision.
The ACPR, like the other NCAs, also retains responsibility for supervising investment firms, including those that are part of banking groups.
NCA participation in the SSM thus offers the benefit of maintaining a link between different levels of supervision, which may interact to a significant degree, for example in the organisation of the compliance function and its inclusion in the overall governance of institutions operating at European level.
In terms of disciplinary sanctions, the ECB may only impose fines and only for breaches of directly applicable European law (CRR and associated regulations). For any other breach, even by the largest institutions, and, as the case may be, their senior managers, the NCAs – including the ACPR for France – open disciplinary proceedings and impose sanctions, at the request of the ECB. The ECB withdraws the licences of significant and non-significant credit institutions, notably following a sanction imposing a total ban on activity imposed by the ACPR and at the latter’s request.
The ACPR, alongside other European national supervisors, thus wields specific and vital powers under the SSM. It adds to these its own specific powers, which stem from its unique supervisory model.
In the first place, the ACPR has SSM-related powers at the level of the Banking Union to:
- review licensing applications;
- take part in supervising the largest banks;
- supervise banks, except for the largest institutions;
- gather data and analyse markets;
- play a role in carrying out comparisons and impact studies to calibrate regulations and supervisory tools such as stress tests.
In the second place, the ACPR has specific cross-cutting powers within the financial sector covering:
- joint supervision of the banking and insurance sectors;
- customer protection: cooperation at national level (ACPR-AMF Joint Unit) and international level;
AML/CFT : ACPR supervisory assignment / technical cooperation, international and European negotiations ; negotiations;
supervision of the separation of market and deposit-taking activities;
- rules applicable to mortgage credit companies.
With these cross-cutting powers, the ACPR can perform integrated supervision that strengthens the oversight carried out by the ECB, for example in terms of supervising financial conglomerates and bancassurers (see 1.2, above).
The ACPR’s powers to deal with the risk of misconduct also help to boost stakeholder confidence and improve the integrity of the financial sector through better customer protection and AML/CFT supervision (see below).
Europe’s new supervisory model is characterised by strengthened central sector-specific powers, particularly in the case of the Banking Union, and by national-level supervisors, many of which have expanded their powers horizontally.
National authorities wield powers that usefully complement prudential supervision because of their relationship with supervised entities and specifically their:
- in-depth knowledge of the environment and operating conditions of institutions established on their national territory and
- experience gained from other functions.