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Capital Markets Union: The Need for Common Laws and Common Supervision

Author

Listed:
  • Jan Friedrich
  • Matthias Thiemann

Abstract

This paper examines the supervision of Central Clearing Counterparties (CCPs) in Europe, since they function as an important pillar of the Capital Markets Union. Our research indicates that the current national-based supervision of CCPs leads to regulatory arbitrage and exposes the EU to huge financial risks, especially in the context of the Brexit. We claim that a unified capital market should have a centralized capital markets regulator to avoid a hazardous regulatory race to the bottom. We argue that the ECB is suitable for taking on this common supervisor role in the short run, while ESMA should be equipped with enhanced capabilities to accomplish the task in the long run. Dieser Artikel analysiert die Aufsicht von central clearing counterparties (CCPs) in Europa, da diese einen wichtigen Eckpfeiler der Kapitalmarktunion darstellen. Unsere Forschung deutet darauf hin, dass die derzeitige nationale Organisation der Aufsicht von CCPs zu regulatorischer Arbitrage führt und die EU einem erheblichen finanziellen Risiko aussetzt, insbesondere vor dem Hintergrund des Brexit. Wir fordern, dass ein einheitlicher Kapitalmarkt auch einen zentralen Kapitalmarktaufseher haben sollte, um ein gefährliches regulatorisches race-to-the-bottom zu verhindern. Wir argumentieren, dass die ECB kurzfristig ein geeigneter zentraler Aufseher ist, während ESMA langfristig mit erweiterten Kompetenzen ausgestattet werden sollte um diese Aufgabe zu übernehmen.

Suggested Citation

  • Jan Friedrich & Matthias Thiemann, 2017. "Capital Markets Union: The Need for Common Laws and Common Supervision," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 86(2), pages 61-75.
    • Handle: RePEc:diw:diwvjh:86-2-5
    DOI: 10.3790/vjh.86.2.61
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    Citations

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    Cited by:

    1. Heider, Florian & Krahnen, Jan Pieter & Langenbucher, Katja & Lindner, Vincent & Schlegel, Jonas & Tröger, Tobias, 2024. "The geopolitical case for CMU and two different pathways toward capital market integration," SAFE White Paper Series 102, Leibniz Institute for Financial Research SAFE.
    2. Cimadomo, Jacopo & Gordo Mora, Esther & Palazzo, Alessandra Anna, 2022. "Enhancing private and public risk sharing: lessons from the literature and reflections on the COVID-19 crisis," Occasional Paper Series 306, European Central Bank.
    3. Tümmler, Mario & Thiemann, Matthias, 2020. "Beyond moral hazard arguments: The role of national deposit insurance schemes for member states' preferences on EDIS," SAFE White Paper Series 72, Leibniz Institute for Financial Research SAFE.
    4. Friedrich, Jan & Thiemann, Matthias, 2018. "A new governance architecture for European financial markets? Towards a European supervision of CCPs," SAFE White Paper Series 53, Leibniz Institute for Financial Research SAFE.

    More about this item

    Keywords

    Capital Markets Union; clearing; regulatory competition; regulatory arbitrage; supervision;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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