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Resource Centre > Glossary > Lamfalussy process

An approach to developing financial services regulations by the European Union (including securities, later extended to banking and insurance sectors), named after the chair of the EU advisory committee who developed it: Alexandre Lamfalussy. The process was proposed in the Wise Men’s Report of February 2001, and approved by the European Parliament in 2002. It consists of four distinct levels:

  1. EU adopts legislation using a co-decision procedure, having agreed broad framework principles;
  2. Detailed rules on implementation of the broad framework are developed at the EU level using Comitology Procedure (executive powers delegated by the Council of Ministers to the European Commission) – see the European Securities Committee and the Inter-Institutional Monitoring Group;  
  3. Implementation at the Member State-level – where greater cooperation and networking between national regulators ensures more effective implementation;
  4. Enforcement of EU law at the national level – in order to make it efficient, the Commission plays a supervisory role, and national regulators network with the Commission and with each other.

At present, there are a number of Directives called ‘the Lamfalussy Directives’: crucial Directives forming the Commission’s Financial Services Action Plan. There are ‘level 1 Directives’ which set out framework principles:

There are also ‘level 2 Directives’, which implement these general framework principles (see the Lamfalussy League Table).