To summarise, this consists of: 1.  a few framework principles laid down in Community legislation (Level 1);  2.  a series of technical implementing measures defined by the European Commission (Level 2);  3.  a system of committees through which cooperation takes place among the national authorities for implementation of the legislation and convergence of supervisory practices (Level 3);  4.  under Level 4, the European Commission is given the task of monitoring the application of European Law, with the help of the national authorities and the private sector.
Although this system has borne some fruit over recent years, the question remains whether financial market developments necessitate substantial improvements in the quality of the European regulatory set-up. There are at least four arguments that support this hypothesis. First, there is no doubt that the banking and financial systems of the various countries continue to be diverse.