28 Jan 2025

Why the EU doesn’t need a single supervisor for its financial markets – yet

Apostolos Thomadakis

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The debate on the future of capital market supervision in Europe has gained renewed momentum, particularly following remarks made in November 2023 by European Central Bank President Christine Lagarde, who advocated for the creation of a European Securities and
Exchange Commission (European SEC). This idea presents a significant shift from the current fragmented supervisory landscape towards a centralised, pan-European authority overseeing capital markets.

However, moving from the status quo to a fully-fledged European SEC would be an extreme leap. Instead, the real emphasis should be on efforts to boost coordination across Member States through what we can call ‘single supervision’. This would serve as a critical stepping stone
towards a single supervisor and ensure that any transition to a European SEC would be both feasible and sustainable.