Explaining the Expanded Mandate and Powers of the European Securities and Markets Authority (ESMA) in Financial Sector Governance

Wednesday, July 12, 2017
Turnbull Room (University of Glasgow)
Aneta Spendzharova , Political Science, Maastricht University
Originating from a small networked committee of national regulators, CESR, the European Securities and Markets Authority (ESMA) has gained considerable powers since 2008. It has become the single supervisor of credit rating agencies and trade repositories operating in the EU and has recently fined market actors for violating the EU rules. Thus, over time, ESMA’s mandate and capacity to regulate the European securities sector have become comparable to those of its US counterpart, the Securities and Exchange Commission. ESMA has both decision-making and information gathering competences. It decides upon important binding technical standards in securities trading and plays a crucial role in the harmonization of national practices across its counterparts in the member states through issuing guidelines, best practices and conducting peer reviews.

What explains this unparalleled transfer of powers to the supranational level in European financial sector governance? This paper argues that the succession of crises affecting the EU’s financial and economic order created a momentum for centralization of governance, operationalized in terms of the creation of new EU institutions and transfer of powers and competences from the member states to the EU. Furthermore, following up on the adopted legislative reforms, ESMA has also received new responsibilities for ensuring harmonized rule application across the EU. The agency’s growing powers and prominence in EU financial sector governance are examined focusing on the case of the Markets in Financial Instruments Directive II (MiFID II).

  • Spendzharova - CES Glasgow, ESMA paper.pdf (933.0 kB)