EU reform plan: financial markets are to become more attractive

Brussels (dpa) – The complex financial market rules in Germany and the other EU member states are to be fundamentally streamlined and modernized according to the wishes of the European Commission. A reform package presented in Brussels to increase competitiveness envisages harmonizing regulations for trading venues and streamlining supervisory processes.

For example, supervisory powers over significant cross-border actors are to be transferred to the European Securities and Markets Authority (ESMA) in Paris. These would include, for instance, certain trading venues, all providers of crypto services and central securities depositories. The latter are responsible for the custody and transfer of securities.

Ten trillion euros in savings

The aim of the planned reforms is to create the conditions for a globally attractive financial market. Citizens are also to receive cheaper and better access to investment opportunities throughout the EU. This is of crucial importance, the EU Commission argues, as private individuals currently have around 10 trillion euros of their savings in bank accounts. These deposits are safe, but often generate low returns compared to investments in securities.

The responsible EU Commissioner Maria Luís Albuquerque said in Brussels that by building a genuine single financial market, people would be offered better opportunities to grow their wealth. Europe had tolerated a fragmentation that slowed down the economy for too long.

Decision lies with Parliament and member states

The proposals of the EU Commission will now be discussed by the European Parliament and the Council of the member states. The Commission hopes that they can then be adopted and implemented.

Initial reactions from members of parliament were predominantly positive. The economic and financial policy spokesperson of the European People’s Party group, Markus Ferber, described the package as an opportunity to take a big step forward. “Compared to the USA, our capital markets are fragmented, small and illiquid – this harms growth, innovation and competitiveness in Europe every day,” said the parliamentarian. The German MEP Rasmus Andresen from the Greens stated that Europe needs strong, central financial market supervision. That is why his group welcomes the Commission’s proposal to entrust ESMA directly with the supervision of key market actors. (4 December)