The European Union’s markets, banking and insurance watchdogs could be funded from a direct levy on the sector, the bloc’s executive body said in a document seen by Reuters.

The European Commission has been reviewing the three watchdogs it launched in 2011 to make supervision of banks, markets and insurers more consistent across its 28 member countries.

Currently the European Securities and Markets Authority, the European Banking Authority and the European Insurance and Occupational Pensions Authority receive 60 per cent of their funding from national supervisors and 40 per cent from the central EU budget.

“Given EU and national budgetary constraints, the Commission considers that a revision of the existing funding model should therefore be envisaged, ideally abolishing EU and national contributions,” a draft European Commission paper seen by Reuters said.

“To this end, the Commission will launch preparatory work to determine under which conditions and additional steps the ESAs could be fully self-financed by the financial services sector.”

The review also looked at how the powers of the three EU agencies could be extended.

It said potential areas for expanding their roles include enforcing accounting rules, supervising the “shadow banking” sector, and direct supervision of highly integrated market infrastructure like clearing houses.