In a ‘debate paper’ published on Wednesday 4 December, the Association Europe-Finances-Régulation (AEFR) argues that the introduction of a single supervisory system for EU financial markets, based on closer cooperation between a central authority and national supervisors, is “possible and desirable” if progress is to be made in the short term on the Savings and Investment Union project (see EUROPE 13519/1). However, segmenting such supervision remains a challenge.
AEFR has examined the reasons why, over the last 25 years, convergence between national supervisors has been systematically favoured to the detriment of centralised supervision. The association also analysed how the various proposals at European level advocated reforms to the governance of the EU’s European Securities and Markets Authority (ESMA) while preserving a significant role for national authorities.
“National supervision of national financial players is seen as an important aspect of national sovereignty, fueling misgivings about European supervision. It takes a particularly serious crisis to overcome them”, say the authors, referring to the creation of the ‘Single Supervisory Mechanism’ in the context of the euro area sovereign debt crisis, which put banks at risk from 2008 onwards.
According to the association, the major clearing houses, the main central securities depositories (CSDs) and certain asset managers are currently among the systemic players most concerned by a single supervisory framework. However, AEFR considers it difficult not to have a single supervisor covering all the players in the chain from issuers to CSDs.
To see the debate paper, go to https://aeur.eu/f/eq3 (Original version in French by Bernard Denuit)