The European Central Bank has endorsed significant reforms to deepen EU financial integration and strengthen capital markets. The plan aims to reduce fragmentation, improve cross-border investment, and bolster financial stability. A key element involves expanding the powers of the European Securities and Markets Authority for direct supervision. The reforms also include stricter oversight for large crypto-asset firms as their connection to traditional finance grows, aiming to mitigate systemic risks.
The European Central Bank has backed major reforms aimed at deepening financial integration across the European Union. These proposals focus on improving capital market operations and supervision across member states.
The central bank stated stronger and more connected capital markets would help absorb economic shocks and improve how monetary policy works across the region. It also highlighted that deeper markets could help boost investment and economic growth.
A key part of the plan is to give more power to European Securities and Markets Authority, allowing it to directly supervise major cross-border financial players. National regulators would still play an important role, but coordination at the European level would increase.
The reforms also aim to remove barriers that limit cross-border investment and trading. This includes improving cooperation between regulators and creating systems that better support financial activity.
The central bank supports expanding supervision for large financial firms and crypto companies. Bringing oversight to crypto-asset service providers could reduce risks and prevent instability from spreading into the wider financial system.
It also called for stricter rules for large crypto firms, including better risk management and clearer reporting requirements. This is deemed necessary as crypto firms become more connected to traditional banking systems.
Regulators stress that innovation must come with strong safeguards to manage risks and protect the system. The central bank views the reforms as an important step toward a more unified and resilient financial system in Europe.
