The European Central Bank published a blog post summarising an Occasional Paper arguing that EU capital markets supervision remains overly complex and fragmented and that more integrated EU-level supervision is needed to better capture cross-border risks and support the savings and investments union agenda. The paper frames the European Commission’s December 2025 “market integration and supervision package” as an opportunity to expand EU-level supervision via reforms to the European Securities and Markets Authority (ESMA). The analysis proposes a proportionate two-tier model in which ESMA would directly supervise certain large, cross-border entities while national authorities would continue to supervise most firms. Based on size and cross-border relevance, five or six central counterparties and 15 central securities depositories, around 40% of each sector, could fall under direct EU supervision. For asset management, the paper points to a stronger ESMA role in supervisory convergence for the 10 to 15 largest cross-border groups rather than direct supervision in the near term. It argues for EU-level supervision of all crypto-asset service providers under the Markets in Crypto-assets Regulation, noting that 94 providers were authorised as of November 2025 and that many intend to operate across multiple Member States, and suggests additional prudential requirements for the largest and most complex providers. To underpin expanded responsibilities, it highlights the need for an independent ESMA Executive Board with full enforcement powers, while keeping national authorities closely involved as primary supervisors for domestic firms.
European Central Bank 2026-03-30
European Central Bank paper sets out options to centralise supervision of major EU capital market players through a strengthened ESMA
The European Central Bank published a blog post on an Occasional Paper arguing EU capital markets supervision is overly complex and fragmented and calling for more integrated EU-level oversight via the European Commission’s December 2025 “market integration and supervision package” to expand the European Securities and Markets Authority’s role. It proposes a two-tier model in which ESMA directly supervises certain large cross-border entities, including five or six central counterparties and 15 central securities depositories, and promotes supervisory convergence for the largest cross-border asset managers. The paper also advocates EU-level supervision of all crypto-asset service providers under the Markets in Crypto-assets Regulation, with extra prudential requirements for the largest providers, and an independent ESMA Executive Board with full enforcement powers, while national authorities remain primary supervisors for domestic firms.