As the EU institutions in Brussels come to the end of their electoral mandate they are going out with a bang as far as financial services are concerned. Numerous legislative measures to tighten oversight via agreements between Commission, Parliament and Council (national governments) are in hand. One after another, they are set to be finalised before the end of May, according to the Council.
The centrepiece of the 2014-19 mandate period has been the Capital Markets Union. Alongside that, a package of measures to overhaul the European supervisory authorities (ESAs), has moved to the Council following endorsement by the Parliament’s economic and monetary affairs (ECON) committee. The Romanian presidency describes this as a priority, although it has also proved controversial as it transfers some powers from member state financial regulators to the ESAs.
The ESA package targets harmonised governance with the principal aim of deepening financial integration. Measures in focus include anti money laundering.
One factor is Brexit and the UK financial services sector. Othmar Karas, an Austrian Christian Democrat MEP, articulated the concerns of many when, following ECON’s endorsement of the ESA reform package, he wrote: “European financial market supervision will also receive stronger cut-through rights with respect to third countries. This is necessary to make sure that the Brits, once they are out, do not start to do dodgy business in the EU with weakened rules. We will make sure that whoever does financial business in the EU has to obey our strict rules.”
The ESA reform package furthers the cause of regulatory harmonisation across the rest of the EU. The proposed regulation has now moved to discussion at member state government level (see page 21).
Not everyone is pleased to see the spate of financial legislation thundering through Brussels, however. Pieter Cleppe, head of the Brussels office of the UK-based anti EU-integration think tank Open Europe, appears surprised at the flow “despite Brexit and despite growing populism from the anti-establishment movement in Central Europe”. [...]
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