The European Commission will call for “efficient and harmonised” supervision of capital markets in its forthcoming communication on capital markets integration, according a draft document seen by Euractiv.
The language – which stops short of calling for “centralised supervision” long urged by France – represents a concession to smaller member states that are staunchly opposed to integrating their supervisory authorities.
“Delivering single supervision in capital markets will require a new balance between supervisory responsibility at EU and national levels,” the document reads.
“It will be essential to improve efficiency of supervisory activities and simplify supervisory processes,” it adds, noting that Europe’s current supervisory authorities should “make better use” of existing tools to “achieve more integrated and harmonised supervision”.
The document also notes that the EU executive will formally propose measures aimed at strengthening supervisory convergence tools in the third quarter of 2026.
A proposal aimed at achieving “more unified supervision of capital markets” through the transference of “certain tasks to the EU level” will be made around the same time, it adds.
Numerous member states, including Luxembourg and Ireland, are vehemently opposed to centralising supervision, which many see as a ruse by France to gain greater control over their capital markets.
The EU’s financial markets watchdog, ESMA, is based in Paris.
Other proposals
The document also includes a range of other measures aimed at integrating Europe’s long-stalled “Capital Markets Union” – recently rechristened the “Savings and Investment Union” by former Italian premier Enrico Letta.
These include measures aimed at strengthening Europe’s asset management sector, developing the bloc’s supplementary pensions sector, and improving financial literacy.
The document also includes multiple recommendations aimed at boosting Europe’s securitisation market. A formal proposal to review “due diligence, transparency and prudential requirements for banks and insurers” will be made in the second quarter of this year, it notes.
The document comes at a time when EU leaders are scrambling to plug the bloc’s investment gap, especially in defence.
A fully integrated SIU could boost private sector investment by €470 billion per year, according to the Commission.
The Communication is set to be formally released on 19 March and will be presented by the Commission’s industry chief, Stéphane Séjourné.
It also will be discussed by EU leaders at summit on 20-21 March.
[OM]
