A plan driven by Europe's largest economies would see powers to oversee financial markets centralized at the EU level rather than national level, a proposed shift that would cause serious concern to Ireland and Luxembourg, according to a document seen by the Financial Times.
The coalition of the bloc's big six β France, Germany, Italy, Spain, the Netherlands, and Belgium β is pushing for the European Securities and Markets Authority (ESMA) to have direct supervision over large asset managers and certain market activities, moving away from the current system where national regulators hold primary authority.
The proposal, which is part of broader discussions on deepening the EU's capital markets union, would particularly affect Ireland and Luxembourg, which host large fund management industries. The two countries have traditionally opposed such centralization, arguing it could undermine their regulatory flexibility and competitiveness.
EU officials are expected to debate the plan in the coming months, with any changes requiring approval from member states and the European Parliament.
