The financial crisis underscored both the importance of financial supervision and its pre-crisis malfunctioning. Inresponse, substantive reforms have been carried out in Europe and elsewhere. This paper discusses the renewedfinancial supervision system in the EU. It examines supervision at the EU-level and considers the role of national,cross-border and international supervision.The reforms undoubtedly lead to a strengthening of EU powers. The EU's role will even grow over time. The roleof cross-border and international supervision has equally increased. Despite these changes, the heart of financialsupervision remains firmly at the national level. This Member State dominance is in sharp contrast with the stateof EU financial sector integration. Yet, a substantial shift to EU supervision is currently unfeasible, due to legalproblems and to Member States' crisis management responsibilities.This inability to align financial supervision with financial sector integration could result once again in supervisoryfailings. If so, a difficult choice between genuinely europeanising financial supervision (with the subsequent legaland fiscal implications) or cutting back the single market arises. The paper concludes that while the renewedsupervisory framework is far from perfect, policymakers should strive towards making it work - or be prepared totake uncomfortable decisions.
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