2023-11-17 10:17:03
Frankfurt (awp/afp) – The President of the European Central Bank pleaded Friday for the creation of a “European SEC” on the model of the American market policeman, a crucial step according to her to complete the Europe of capital markets.
The European Union has a European Securities and Markets Authority (ESMA). But its supervisory action remains “largely the responsibility of the national supervisor”, preventing the same rules from applying in all member countries, Christine Lagarde declared at a banking conference in Frankfurt. “Creating a European SEC” inspired by the Securities and Exchange Commission (SEC), sole supervisor of American markets, “for example by extending the powers of ESMA, could be the solution”, according to the French central banker.
This authority should be accompanied by a “broad mandate, including direct supervision”, to mitigate systemic risks, she added.
To mitigate the fragmentation of capital markets still perceptible in the EU, “a more ambitious approach should involve the creation of a single regulation applied by a unified supervisor”, namely a body of rules to govern the markets which would apply in the same way in all countries, suggests the former director of the IMF.
The advantage, according to her, would be to allow companies, particularly start-ups that are hungry for financing, to “broaden their ambitions” by raising funds more easily beyond their national borders. Today bond markets are three times smaller in the EU than in the United States. And the ratio is one to five when it comes to venture capital. In particular, European start-ups attract less than half the funding of their American counterparts.
Integrated capital markets in the EU are therefore essential while “the challenges of deglobalization, demographics and decarbonization loom on the horizon,” concluded the President of the ECB.
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