Or to put it differently: they have to balance the need that their actions contribute to preserving financial stability, while at the same time avoiding creating any unnecessary regulatory burden for the supervised entities.
A major step to achieve this was the introduction of the Lamfalussy process, which has promoted more efficient and effective regulation and supervision in the EU financial services sector in the past years. The Lamfalussy process was initially created with the purpose to accelerate the adoption of regulatory measures related to the Financial Services Action Plan in the securities sector.