“This could be the solution”: ECB President Lagarde encourages European stock market supervision

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While the strong capital market in the United States has enjoyed uniform oversight from the SEC for decades, direct control in Europe largely occurs at the national level.

Lagarde said this at a banking conference in Frankfurt on Friday. This situation leads to fragmentation in the implementation of EU regulations.

Referring to the European Securities and Markets Authority (ESMA), Lagarde said, “The creation of a European Securities and Exchange Commission, for example by expanding the powers of ESMA, could be a solution.” According to Lagarde, ESMA will need “a broad mandate, including direct supervision, to mitigate systemic risks” such as those posed by large cross-border companies.

The European Central Bank’s (ECB) euro currency custodians have long pressed for progress in unifying financial and capital markets in Europe, including the further development of the Capital Markets Union. This is mainly about reducing bureaucratic barriers between each state of the European Union in order to give companies more opportunities to raise money. The EU Commission’s plans on this issue have been on the table since 2015.

“Despite the European Commission’s two action plans, the European capital market remains fragmented,” Lagarde said. But a green restructuring of the economy requires large amounts of capital, including private investors. “We won’t be able to make these transitions unless we get the Capital Markets Union back on track,” Lagarde said.

Europeans must “build on their good will and move forward, otherwise we risk Europe not being able to meet the challenges ahead,” the European Central Bank President warned.

(SDA)

Source :Blick