Aurore Lalucq (S&D, French) expressed optimism on Wednesday 14 May that the European Parliament’s political groups would be able to reach a compromise in favour of a more unified financial supervision framework within the EU - in particular by reforming the governance of the European Securities and Markets Authority (ESMA), as advocated by the MEP.
The Chair of the European Parliament’s Committee on Economic and Financial Affairs (ECON) believes it is necessary to draw inspiration from the model of the European Central Bank and the Single Supervisory Mechanism, by granting ESMA direct supervisory powers over certain institutions and colleges that could give the Savings and Investment Union (SIU) “real operational capacity” (see EUROPE 13603/5).
“We must now build a forward-looking, well-equipped and responsible ESMA. Otherwise, we will remain stuck in a ‘chicken or the egg’ dilemma, waiting for trust and integration before conferring real authority”, she said at a seminar organised by the Centre for European Policy Studies (CEPS), the European Capital Markets Institute (ECMI), and the Association Europe-Finances-Régulations (AEFR).
“[EU] Member States often see supervision as an extension of their sovereignty. But I’ll ask the question again: What is that sovereignty worth if our own capital leaves the EU in search of scale, returns and predictability - particularly in the United States?”, stressed Ms Lalucq, who is the author of a draft European Parliament report on competitiveness and investment in the EU (see EUROPE 13601/7), to which more than 600 amendments have been tabled.
“I am convinced that within the European Parliament we will eventually find a compromise”, she declared.
Centralisation/convergence debate. The discussions that continued on Wednesday afternoon illustrated the continuing divergence between those in favour of centralised supervision of Europe’s financial markets and those arguing for a more convergent approach.
The Vice-President of the Belgian Financial Services and Markets Authority (FSMA), Annemie Rombouts, was sceptical about the effectiveness of the institutional refocusing advocated by Aurore Lalucq, believing that it did not address the root causes of market fragmentation: low tax incentives, low European yields and national distribution models.
Conversely, the former chairman of the French financial markets authority (AMF), Robert Ophèle, highlighted the failure of a model based on convergence between national supervisors alone. In particular, he pointed to persistent shortcomings in the supervision of asset management companies, whose complex cross-border activities often escape consistent supervision. Moreover, according to Mr Ophèle, this fragmentation could increase systemic risks in the event of a crisis. (Original version in French by Bernard Denuit)