The new law increases EU watchdogs’ responsibilities, including strengthening the mandate of the European Banking Authority in a bid to prevent money laundering and terrorist financing. National authorities, however, will be required to identify weaknesses in the EU system with regards to such issues.

Additionally, the European Securities and Markets Authority will be given direct supervisory power when it comes to investment funds and benchmarks, but it will coordinate with member states in a number of areas, including fintech. 

Luxembourg’s minister of finance Pierre Gramegna (DP) said in a 16 April statement that he was “pleased that the text adopted by the Parliament fully takes into account the comments made by member states, including Luxembourg,” adding: “The compromise thus found reinforces the European supervisory authorities on an ad hoc basis, while maintaining the powers of the national authorities whose expertise, responsiveness and efficiency have been recognised.”

The law was adopted with 521 in favour and 70 against, with 65 abstentions.