The Sound of Economics The EU’s capital markets quest
Jul 2, 2025
In this discussion, Nicolas Véron, a senior fellow at Bruegel with a focus on financial regulation, and Enrico Letta, former Italian Prime Minister and proponent of EU integration, dive into the future of the EU's capital markets. They explore how establishing a single capital markets supervisor could enhance competitiveness and safety in Europe's economy. The duo emphasizes the importance of streamlining the European Securities and Markets Authority and moving away from national silos to unleash the potential of financial services across member states.
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ESMA as Single Supervisor
- ESMA should become a single supervisor by absorbing national capital market supervisory mandates.
- This integration would simplify and unify capital market supervision across the EU.
Need to Overcome Fragmentation
- Fragmented financial supervision in 27 member states hampers the EU's financial market integration.
- A single supervisor model, like the ECB in banking, can enhance competitiveness and unity.
Capital Flight Due to Fragmentation
- EU's capital markets are underdeveloped due to fragmentation and cultural barriers.
- European savings often flow to the US, feeding foreign companies instead of European ones.