BRUSSELS, April 10 (Reuters) - The European Central Bank on Friday endorsed the European Commission’s plan to better integrate EU capital markets through joint supervision, but cautioned the move
ECB Endorses EU Plan for Centralised Capital Markets Supervision
ECB's Support and Implications for EU Capital Markets Integration
ECB Endorsement and Cautions
BRUSSELS, April 10 (Reuters) - The European Central Bank on Friday endorsed the European Commission’s plan to better integrate EU capital markets through joint supervision, but cautioned the move needed to be adequately staffed and financed.
Background: Push for EU-Level Supervision
The push for financial market players to be supervised at an EU rather than national level is part of an attempt - led by France and Germany - to boost the bloc's competitiveness as it struggles with weak growth and fierce competition from the US and China.
Market and Government Reactions
The central bank's backing will send a signal of confidence to markets, as well as the governments of some smaller EU countries, such as Ireland and Luxembourg, that have not been enthusiastic about the plan.
Details of the ECB Opinion
Scope of Stronger EU-Level Oversight
In an opinion, the ECB said it was fully in favour of stronger EU‑level oversight of systemically important, cross‑border financial market players, including major trading venues, central counterparties, central securities depositories and crypto-asset service providers.
Proposed Role of ESMA
The Commission has proposed such oversight be moved from national authorities to the European Securities and Markets Authority (ESMA) in Paris.
"The ECB fully supports the Commission proposals, which constitute an ambitious step towards deeper integration of capital markets and financial market supervision within the Union," the ECB said in the opinion that is required by the EU legislative process, but is not binding for lawmakers.
ECB's Suggested Involvement and Resource Requirements
The central bank said it should have a non-voting seat on the board of ESMA and that its expertise should be taken into account not just in relation to supervisory decisions, but also technical standards, guidelines and recommendations.
The ECB noted that ESMA needed to be given sufficient resources and staffing to take on the additional responsibilities and advised that the transition from national to EU-level supervision be sequenced to minimise disruption.
Next Steps in the Legislative Process
The Commission proposal will now be negotiated between EU governments and the European Parliament in a process that is likely to take months, before it becomes law.
(Reporting by Jan StrupczewskiEditing by Christina Fincher)
