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ESMA whole-heartedly supports the Commission’s Capital Markets Union agenda. The growth potential and need for capital markets in the EU is strong, and well-documented. I have no doubts that implementing the Commission’s Action Plan has real potential to unleash additional growth in the EU’s capital markets.
Making the best use of existing competencies should be an important pillar of developing non-bank macro-prudential policies. This is all the more important considering that – compared for example to banking – non-bank activities are highly heterogeneous, and non-bank entities, such as investment funds, Special Purpose Vehicles, and Central Counter Parties (CCPs) present very different risk profiles.
This has two implications: First, securities market regulators’ expertise will be crucial. We should ensure that they are sufficiently involved in various phases of the decision making process at the ESRB. Second, macro-prudential tools designed for non-banks need to be fit for purpose and not a mechanistic transposition of macro-prudential tools used in the banking space.
As a next step, the suitability of existing micro tools and available data should be assessed in a macro-prudential context. Making existing micro tools available for also addressing macro-prudential risks will be – I believe – a key precondition for an effective non-bank macro-prudential system.