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ECB Backs EU Capital Markets Overhaul
10 Apr
Summary
- ECB supports joint EU supervision for key financial market players.
- The move aims to boost EU competitiveness against US and China.
- ECB cautions on adequate staffing and financing for new oversight.
The European Central Bank has signaled its strong support for the European Commission's proposal to deepen the integration of EU capital markets through unified supervision. This plan involves bringing key financial market players under joint EU-level oversight, a move championed by France and Germany to bolster the bloc's competitive standing. The ECB's endorsement is expected to instill confidence in financial markets and governments that have expressed reservations.
The proposed oversight would transfer responsibility for systemically important, cross-border financial entities from national authorities to the European Securities and Markets Authority (ESMA) in Paris. The ECB fully endorses this ambitious step towards greater integration. However, the central bank emphasized that ESMA must be adequately staffed and financed to manage these new responsibilities effectively.
Furthermore, the ECB has requested a non-voting seat on ESMA's board to ensure its expertise is considered in supervisory decisions and technical standards. The transition to EU-level supervision should be carefully sequenced to minimize disruption. The proposal will now undergo negotiations between EU governments and the European Parliament, a process likely to span several months before potential enactment into law.
