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Proposal for a single EU professional secrecy standard for the supervision of the financial sector

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The policy contribution analyses the professional secrecy standards and accountability of EU financial supervisory authorities according to CRD IV, MiFD II and Solvency II by taking into account the latest European Court of Justice judgments in this regard and found that the standards differ slightly between the sectors. In order to enhance legal certainty, create a level playing field for market participants and to foster transparency, the authors propose the adoption of a single professional secrecy standard across the three financial sectors which would also apply to the ECB.

FSC Research Workshop 2019
29 October 2019
Policy paper contribution
Extract of an article published in the European Law Review
Source: Financial Risk and Stability Network

Author:
Nikolai Badenhoop, Humboldt University Berlin

PDF  >  Proposal for a single EU professional secrecy standard for the supervision of the financial sector

The policy paper has been prepared as an accompanying contribution to the Financial Stability Conference 2019 in Berlin and presented at the FSC Research Workshop the following day. Researchers from various institutions were invited to draft policy papers on aspects of the conference topics and financial stability issues to be presented and discussed at the workshop.
Preliminary note

This policy contribution extracts parts of the article “Towards a single standard of professional secrecy for supervisory authorities – a reform proposal” written with René Smits and published in 44(3) European Law Review (2019). In this article, we analyse the professional secrecy standards and accountability of EU financial supervisory authorities according to CRD IV, MiFD II and Solvency II by taking into account the latest European Court of Justice judgments in this regard and found that the standards differ slightly between the sectors – which also the ECJ seems to criticise. In order to enhance legal certainty, create a level playing field for market participants and to foster transparency, we propose the adoption of a single professional secrecy standard across the three financial sectors which would also apply to the ECB.

We propose the adoption of a new legal act in the form of a regulation. Thus, the discussion about minimum and maximum harmonisation would be a thing of the past and a clear standard of professional secrecy would apply across the EU. The Regulation on professional secrecy for supervisory authorities in the financial sector would replace the existing provisions in the relevant directives. An inventory of provisions in need of amendment and replacement could be made and a public consultation held on the new standard-setting regulation.

 

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