Assessing EU Financial Supervision: Is the Current Architecture Fit for Integrated, Competitive Markets?

Deeper and more efficient EU capital markets that can fuel investment, innovation, and growth require a stronger EU role in financial supervision and greater convergence among regulators.

Since the global financial crisis, the EU’s supervisory framework has evolved incrementally, adding new institutions and mandates. Over the same period, the financial system has transformed, marked by rising non‑bank financial intermediation and increasingly intertwined cross‑sectoral connections that stretch beyond traditional sectoral boundaries.

As the EU pushes for deeper supervisory integration and re‑emphasises competitiveness and simplification, these shifts raise a broader question: does the current supervisory architecture best serve an integrated, competitive, and resilient EU financial system?

This paper tackles that question by mapping the composition and structure of the EU supervisory architecture. It examines how simplification can be achieved through improved institutional design and argues that an objectives‑based architecture—such as the Four Peaks model, organized around financial stability, prudential soundness, investor protection, and competition—could chart a useful path forward for EU financial supervision.

Carmine Di Noia is Director for Financial and Enterprise Affairs at the OECD and Albert Guarner Piquet is Counsellor in the Directorate for Financial and Enterprise Affairs at the OECD.

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