EU to make banks pay to centralise markets supervision – finance boss

THE European Union wants to centralise market supervision and make banks pay for it, its financial services chief said, signalling how it will seek to regroup after Britain leaves the bloc.

A more integrated supervisory regime is needed to unify the EU’s capital market, European Commission Vice President Valdis Dombrovskis said yesterday.

Britain has long fended off attempts by Brussels to step up EU-level supervision of London, by far Europe’s biggest financial centre, but it will have no say over EU policy after Brexit in 2019.

“We think that national supervisors in the EU should follow the same supervisory priorities,” Mr Dombrovskis said in Estonia, where EU finance ministers meet today.

“We can go further on the path toward supervisory convergence by empowering the European Securities and Markets Authority (ESMA) to directly supervise certain firms,” Mr Dombrovskis said, adding he will propose that banks help pay for their supervision by regulators like ESMA.

There would also be a “strong role” for ESMA and its banking and insurance counterparts in the fintech sector as it seeks to compete with rival centres in London and elsewhere.

“They should coordinate national technological innovation tools such as innovation hubs or regulatory sandboxes,” Mr Dombrovskis added.

The three regulators would also play a role in mobilising and directing capital toward “sustainable and green finance”.

The US Commodity Futures Trading Commission (CFTC) has warned the bloc not to upend an agreement between the United States and the EU on accepting each other’s clearing houses for derivatives transactions.

CFTC chair Christopher Giancarlo said on Tuesday that attempts by the EU to clamp down on clearing of euro-denominated derivatives in Britain after Brexit could damage this. (Reuters)