The institutional fragmentation of responsibilities for financial supervision in the European Union appears to be increasingly out of step with the realities of markets, which have become more integrated and cross-border, according to an analysis by eight experts from the European Central Bank (ECB).
According to the study published on Monday 30 March, this gap has widened over the last decade, as markets have undergone profound changes: the assets of non-bank financial intermediaries now account for more than 110% of EU GDP, while asset management exceeds €20,000 billion and certain activities, such as investment funds, are almost 80% cross-border.
At the same time, the experts noted the extent to which the European landscape is fragmented, marked by the coexistence of 52 national authorities and multiple supervisory models, a complexity unparalleled in other major jurisdictions. Unlike the United States, for example, where the supervision of capital markets is based on a solid federal foundation, the European architecture remains largely fragmented, which, according to the analysis, limits the consistency of public action and increases the operational constraints for cross-border players.
Without reflecting a position of the monetary institute, the ECB experts intend to support the work in progress on the legislative package on market infrastructure (‘MISP’) proposed by the European Commission last December (see EUROPE 13825/24).
In this context, they advocate a targeted integration of supervision, focusing on the most systemic players and genuinely cross-border activities.
See the working document: https://aeur.eu/f/lec (Original version in French by Bernard Denuit)