EU capital markets union: ministers split over exchange oversight

In early October, EU finance ministers agreed on the main points of a measure meant to link European capital markets and remove barriers to cross-border investment. Supervision of the largest exchanges and other key financial market institutions is to pass to the European Securities and Markets Authority (ESMA). For now this is only the basis of a negotiating position, not an adopted law: talks with the European Parliament will follow.

“People can wait for the perfect solution, or they can hold hands and jump together towards the good one,” said Irish finance minister Simon Harris, who negotiated the compromise, as reported by a news agency. Almost all member states backed the agreement; only Belgium abstained.

The Czech Ministry of Finance supports the agreement but insists that national regulators must have a real say in decisions. In its view, no Czech entity should come under the direct supervision of the European authority. Rules alone are not enough, according to ministry spokeswoman Gabriela Krušinová: companies and investors must find it worthwhile to operate across borders, so the EU must above all “remove barriers, simplify rules and reduce the administrative burden”.

Germany, meanwhile, secured that Deutsche Börse, the operator of the Frankfurt exchange, the largest in the EU, will not fall under European supervision. Berlin, according to a news agency report, refused to back the proposal until that exchange stayed under German oversight.

Where European savings are going

The 10 trillion euros mentioned are, according to the European Commission, which draws on Eurostat statistics, household savings in bank accounts across all 27 EU member states. That is not an amount that is supposed to move entirely into investments.

European companies rely more on bank loans than American ones, which more often raise money on capital markets. European savings also frequently flow abroad: the net outflow in 2024 reached 437 billion euros, or about 10.7 trillion crowns, according to this year’s European Commission report.

Shares of American companies make up 34 percent of euro area households’ equity investments, according to a May analysis by the European Central Bank. Stock market capitalisation – the total market value of traded shares – reached 67 percent of gross domestic product in the euro area in 2024, compared with 216 percent in the US.

Around Prague, based on reporting by novinky.cz