Lagarde promotes European stock exchange supervision
According to ECB President Christine Lagarde, the fragmentation of the European capital market could also be overcome with the help of a joint stock exchange supervisory authority. While the strong capital market in the USA has benefited from the uniform supervision of the SEC for decades, direct supervision in Europe largely takes place at national level, said Lagarde at a banking conference in Frankfurt on Friday. This leads to fragmentation in the application of EU regulations.
"The creation of a European stock exchange supervisory authority, for example by expanding the powers of ESMA, could be the solution," said Lagarde with regard to the European Securities and Markets Authority (ESMA). In Lagarde's opinion, ESMA would need "a broad mandate that also includes direct supervision in order to mitigate systemic risks", such as those posed by large cross-border companies.
The euro currency guardians at the European Central Bank (ECB) have long been pushing for progress in the standardization of financial and capital markets in Europe, including the further development of the Capital Markets Union. This is essentially about reducing bureaucratic hurdles between the individual countries of the European Union in order to give companies more opportunities to raise money. The European Commission has had plans for this on the table since 2015.
"Despite two action plans from the European Commission, the European capital market remains fragmented," Lagarde noted. However, the green transformation of the economy requires huge sums of capital - including from private investors. "We will not manage these transitions if we do not get the Capital Markets Union back on track," said Lagarde. Europeans must "build on their good will and move forward, otherwise we risk Europe not being able to meet the challenges ahead", warned the ECB President.
At the banking conference in Frankfurt, Lagarde suggested that direct supervision of European capital markets could be improved by expanding ESMA's powers, which currently primarily focuses on market surveillance. The ECB, as the euro currency guardians, has long advocated for standardizing financial and capital markets in Europe to reduce bureaucratic barriers, with the goal of revitalizing the Capital Markets Union.
Source: www.dpa.com
