Legal boundaries of European Supervisory Authorities (ESAs) in the financial markets: tensions in the development of true regulatory agencies

The financial crisis urged the establishment of a European System of Financial Supervision (ESFS) aimed at promoting the stability of financial markets by ensuring a consistent and coherent mechanism of financial supervision at the EU level. Three EU regulatory agencies, the European Supervisory Authorities (ESAs), were established with the aim of supervising and contributing to the regulation of the sectors of banking, securities and markets, and pensions and insurances. This article aims to explore the boundaries to the powers of these EU agencies in order to understand the limit and the potential of their action and to highlight the legal tensions that prevent the development of true regulatory agencies in the area of financial markets. The focus is on both constitutional boundaries and the institutional ones. When analysing the constitutional limits to ESAs’ action, the aim is to question the sustainability of the so-called Meroni doctrine in the current framework of the ESAs’ powers. Under the institutional boundaries, instead, the external limits to the ESAs’ regulatory action are explored within the complex framework of EU financial market regulations, caught between the subsidiarity approach and the centralization of responsibilities and tasks.