The president of the European Central Bank (ECB), Christine Lagarde, yesterday advocated creating a Securities and Exchange Commission in the European Union similar to the SEC (Security Exchange Commission) in the United States.
Lagarde made this proposal when opening the European Banking Congress in Frankfurt. “Supervision remains largely at national level, which fragments the application of EU law,” he recalled. In fact, surveillance powers are divided among several national regulators.
“Creating a European SEC, for example, expanding the powers and competence of ESMA (European Securities and Markets Authority), could be the answer. “It would need a broad mandate, including direct supervision, to mitigate the systemic risks posed by large cross-border businesses,” he said.
The president of the ECB recalled that financial integration in Europe is one of the pending issues: it is lower than before the financial crisis and the bond markets are three times smaller than in the US. In her opinion, the time for making the leap is propitious: governments now have the highest debt levels since the Second World War and the European recovery fund will end in 2026. A single capital market and a European supervisor could improve efficiencies, because more investments are needed . The Commission estimates that the green transition will require 620 billion euros annually on average until 2030 and the digital transition, another 125 billion euros.
Finally, Lagarde warned that deglobalization forces a change of strategy: it is necessary to "reevaluate supply chains and invest in new ones that are safer, more efficient and closer to home."