EVOLUTION OF THE FINANCIAL SUPERVISION ARCHITECTURE IN THE EU MEMBER STATES - POTENTIAL LESSONS FOR REFORMING THE MACEDONIAN FINANCIAL REGULATORY FRAMEWORK

Abstract

The question of the role that the institutional design of the structure of financial supervision plays for efficient and effective execution of the financial oversight functions, has been subject of substantive empirical research over the past two and a half decades. In a quest for a more effective and efficient supervision over the financial industries, many countries across the world have restructured their national financial oversight systems in a direction of supervisory integration. The EU has not remained immune to this trend. Most member states have introduced reforms to their national oversight frameworks over this period, and particularly in the post-global financial crisis years, which in some cases has resulted in restructuring of the overall supervisory architecture. These reforms have not ended up with a single model of an oversight structure utilized across the region, i.e. the adopted models differ significantly among the member states, however, there is an evident tendency towards a more integrated supervisory structure. Even though the aspect of the institutional set-up of financial supervision is nowadays increasingly associated with the effectiveness of financial oversight, the conducted research in this domain in North Macedonia remains modest. The purpose of this paper is to depict the evolution of the national financial oversight structures across the EU member states, as also to explore the determinants influencing the choice of a certain model and degree of its integration. Based on the current state of affairs in this domain in the EU, the authors conclude that there is a need for an in-depth evaluation of the financial supervision architecture in North Macedonia. Such an analysis should contribute to, and result with a substantive discussion among the relevant stakeholders about the prospects of reforming the domestic financial supervisory framework.