Why the EU doesn’t need a single supervisor for its financial markets – yet

The debate on the future of capital market supervision in Europe has gained renewed momentum, particularly following remarks made in November 2023 by European Central Bank President Christine Lagarde, who advocated for the creation of a European Securities and Exchange Commission (European SEC). This idea presents a significant shift from the current fragmented supervisory landscape towards a centralised, pan-European authority overseeing capital markets.

However, moving from the status quo to a fully-fledged European SEC would be an extreme leap. Instead, the real emphasis should be on efforts to boost coordination across Member States through what we can call ‘single supervision’. This would serve as a critical stepping stone towards a single supervisor and ensure that any transition to a European SEC would be both feasible and sustainable. 

Apostolos Thomadakis is Head of Research at ECMI and Research Fellow at CEPS. The article was originally published by Global Trading on November 28, 2024.