Level 3 of the Lamfalussy process: an effective tool for achieving pan-European regulatory consistency?

The overwhelmingly prominent role of the securities markets within the European financial structure provides futile grounds for regulatory intervention, which has most notably taken the form of the ambitious Financial Services Action Plan and the resulting securities legislation. In seeking to achieve the twin goals of further coalescing the single market as well as creating a more resilient financial system, the Lamfalussy process represents a potent tool. This article evaluates the efficiency of level 3 of the Lamfalussy process and its executing body, the Committee of European Securities Regulators (CESR), by scrutinising the conceptual structure of level 3 together with its practical suitability as well as CESR's efforts in achieving regulatory and supervisory consistency. Lastly, the article analyses the extent to which CESR's ability to impact is compromised by various impediments ranging from its members' non-equivalence of regulatory powers to the potentially adverse effects of bureaucratic and political forces.