One market, one supervision - Rethinking the supervisory landscape for a truly integrated capital market in Europe

Jacopo Carmassi, Johanne Evrard, Zakaria Gati, Cyprien Milea, Laura Parisi, Clément Rouveyrol, Olivier Dumora Lemaire and Alessandro Spolaore

No 383, Occasional Paper Series from European Central Bank

Abstract: This paper provides an evidence-based assessment of the EU supervisory landscape by combining a comprehensive mapping of supervisory models and authorities with an analysis of capital market players across key sectors, including market infrastructures, asset management, and crypto-asset service providers. It documents a highly complex and fragmented supervisory architecture, characterised by a wide variety of national supervisory models and multiple authorities operating across the Union. While regulatory harmonisation through the Single Rulebook has progressed, supervisory responsibilities for capital market players remain largely national, with limited and uneven EU-level powers. This institutional fragmentation is increasingly misaligned with market realities, as capital markets have become more cross-border and integrated, albeit with important differences across sectors. The paper develops an analytical framework to assess options for a review of the EU capital markets supervisory architecture. Based on the sectoral mapping, it distils a few guiding principles for supervisory integration: a consistent approach based on common criteria (such as size and cross-border relevance) while accounting for sectoral specificities, and close cooperation between EU and national authorities. Finally, it conducts a sensitivity analysis around alternative degrees of supervisory integration and calibration criteria, and discusses the governance arrangements needed to make integrated supervision effective in practice. The analysis shows that a more integrated supervisory framework could deliver four key benefits: enhanced supervisory effectiveness, improved supervisory efficiency, reduced complexity and compliance burdens for firms operating across jurisdictions, and the removal of supervisory barriers that currently hinder the cross-border integration of EU capital markets. JEL Classification: E61, F36, G18, G20, G23

Keywords: capital markets union; ESMA; financial integration; financial supervision; market infrastructure; savings and investments union (search for similar items in EconPapers)
Date: 2026-03
Note: 2973356
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