The German government has signalled openness to handing over more powers to a European financial regulator, in a significant shift that would remove one of the biggest obstacles to unifying the bloc’s capital markets.
Germany’s long-standing reluctance to transferring financial supervision from the Bonn-based BaFin to the European Securities and Markets Authority (Esma), which is headquartered in Paris, has been a major stumbling block to progress on the EU’s capital markets union (CMU). The initiative is one of the priorities identified by former Italian prime minister Mario Draghi in his recent report about how Europe can regain its competitive edge against global rivals like China and the US.
German finance minister Lars Klingbeil has recently agreed to explore areas where centralised supervision is warranted, as part of Franco-German preparatory work to advance the CMU, according to three people with knowledge of the matter.