On Thursday 24 September, the European Commission presented its 16-point plan to accelerate the establishment of the Capital Markets Union (CMU). Despite elements of relatively cautious language in its communication, the Commission assures that it is not abandoning the project of centralised supervision of capital markets.
“When we develop a Capital Markets Union, we also need to ensure that capital market rules are applied consistently across borders. This is why one of the lines of work in our Action Plan is also further work towards central European supervision in the area of capital markets”, said Commission Executive Vice-President Valdis Dombrovskis at a press conference.
The text recognises the need for “Truly Integrated and Convergent Supervision” to ensure a level playing field for market players, even more so after the UK’s departure from the EU.
However, it does not venture to reopen the thorny issue of the review of the governance and powers of the European Financial Supervisory Authorities (ESAs), nor does it include concrete proposals.
Valdis Dombrovskis acknowledged that the compromise reached on this dossier had been “substantially below the Commission’s level of ambition” and considered that it is “still important to act in this area”.
This is what the Commission intends to do with regard to crypto-assets (see other news) and with its future proposal for a European supervisor in the fight against money laundering.
As far as the Action Plan is concerned, the Commission merely states that, in 2021, it will assess the need for further harmonisation of EU rules and whether convergence powers are used effectively under current governance. If necessary, it could consider proposing measures to strengthen supervisory coordination or direct supervision by the European Supervisory Authorities, the text says.
This evaluation is in fact provided for in the regulation on the revision of the ESAs itself, explained one European official, adding however that the ‘Wirecard’ scandal (see EUROPE 12558/4) had “changed the dynamics somewhat”.
In this respect, the Commission is committed to assessing the implications of this scandal for the regulation and for capital markets supervision and to taking action to remedy any shortcomings identified in the EU legal framework.
Mixed initial reactions
The 16 actions proposed by the Commission - described in EUROPE 12562/9 - are not all unanimously supported. The European Banking Federation welcomed the Commission’s action plan, which it described as “ambitious”, and specifically hailed the proposals on securitisation, common procedures for reducing withholding taxes and improved access to financial markets for companies.
Reactions from others have been more mixed, such as Finance Watch, which welcomed, for example, the idea of setting up a “European Single Access Point” for companies’ financial and environmental information, but was concerned about proposals to relax the ‘Solvency II’ prudential rules for insurers.
For its part, the BETTER FINANCE organisation expressed its general disappointment and felt that the action plan was limited to only a few “quick fixes” for retail investors.
See the action plan: https://bit.ly/3kKhuhz (Original version in French by Marion Fontana)