DNB advocates stronger ESMA role for market integration

Steven Maijoor, Executive Board Member and Chair of Supervision of De Nederlandsche Bank, outlined DNB's strong support for the European Savings and Investment Union (SIU) and its Market Integration and Supervision Package (MISP).

He highlighted that Europe possesses ample savings, yet capital flow to productive investments remains inefficient.

A deeper, more integrated capital market is crucial for enhancing Europe's competitiveness, fostering innovation, and providing better saving and investment opportunities.

DNB, aligning with the AFM, advocates for direct ESMA supervision of significant market infrastructures, particularly those operating across the EU.

Maijoor argued that centralized European supervision offers distinct advantages: it reduces fragmented oversight, limits regulatory arbitrage, pools expertise and data, and provides a single point of contact for cross-border firms.

This centralization is seen as a vital element for the SIU's success, promising significant financial stability benefits by enabling better monitoring and addressing of inherent cross-border risks at a European level.

Maijoor cautioned that centralization is not a 'silver bullet'; a successful SIU also demands stronger capital markets and addressing structural barriers like insolvency law differences.

DNB presented four priorities for the MISP.

First, ESMA's governance must reflect central bank responsibilities for CCPs and CSDs under direct supervision.

Second, ESMA should assume full prudential supervision for directly overseen trading venues.

Third, ESMA requires a stronger macroprudential role for investment funds to address unmanaged national financial stability risks.

Finally, supervision must be efficient and cost-conscious, avoiding duplication between ESMA and national authorities, a point also noted by the IMF.