Markets, more powers for Esma: EU tightens supervision

The more federal model than the current one will not be dissimilar to that of other European authorities: the single resolution board (SRB), the single banking supervisory system (SSM), the anti-money laundering authority (AMLA). 'We want to move financial market supervision towards the centre,' explains a senior EU official. The idea has so far been opposed by several countries. Ireland and Luxembourg fear losing interest in the eyes of investment funds and credit institutions.

Brussels points out that, on the contrary, a centralisation of financial market supervision will offer international investors the image of a more cohesive, more efficient, safer Europe in the eyes of the world, expanding the flow of global savings to the Union. "The presence of federal supervision in the United States does not prevent the state of Delaware from being a financial centre, nor does it force American banks to be in New York," notes the senior official.

Other member states have always argued against transfers of power in the financial sphere. Ten years ago, Germany accepted the birth of European banking supervision when it realised that the financial crisis was calling into question German-level credit supervision. Today, Berlin is grappling with a radical rethinking of its economic model. Part of the establishment understands that changes even on the financial front are likely to be useful, if not indispensable.

At present, the segmentation of the large single market in finance benefits the large American banks that offer the entire panoply of services for the purchase and sale of financial instruments, passing on the costs via high fees to the end customer. Among other things, the proposal calls for ESMA to increase the size of its budget and the number of employees (currently less than 400). The negotiating match with the Council and Parliament will not be easy.

Indeed, the European Commission's proposal is likely to provoke quite a few raised eyebrows, even though it is based on the conclusions of the European Council last March (a total of two and a half pages out of 13). On the other hand, the economic situation is a growing cause for concern. In 2000, the European economy was 95% of the American one. Today it is worth 65%. When all is said and done, in ten years' time, the European economy will weigh half as much as the American one.