Opinion polls support a more European approach to the crisis. CEPS Commentary, 11 August 2011

In his latest Commentary, Karel Lannoo expresses frustration over the inconsistency between the latest Eurobarometer survey indicating is a clear indication of public support for EU institutions to more aggressively take the lead in resolving the economic crisis and the timidity of those institutions, with the possible exception of the ECB, to do so

EU Retail Financial Market Integration: Mirage or Reality? ECRI Policy Briefs No. 3, 3 June 2008

This paper starts with a bird’s eye view of retail financial markets in the EU today and their degree of integration. It reviews the EU measures affecting retail financial markets and how rule-making has evolved over the last 15 years. A third section discusses issues raised by EU rule-making in retail financial markets and concludes with recommendations for policy

Placing EU banks under undue stress. CEPS Commentary, 2 December 2011

This Commentary surveys the latest round of stress tests administered to EU banks by the European Banking Authority (EBA) and finds their exclusive focus on a single measure of capital, the Tier 1 capital ratio of Basel III, short-sighted. While the first two stress tests underestimated the capital needs in the European banking system, the third test risks overestimating the picture in some cases

MiFID 2.0 unveiled. ECMI Commentary No. 30, 4 November 2011

Although the drafts of MiFID 2.0, published on October 20th, follow largely what had been proposed by the CESR (Committee of European Securities Regulators) and the European Commission, the documents took observers by surprise in both their approach and length. This ECMI Commentary explains how the original legislation has been amended with the principal aim of levelling the playing field and examines its novel features. Coming together at the same time as several other pieces of draft financial regulation that have recently been proposed or announced, the author finds that they portend a very heavy workload for the European Parliament and the EU Council in the coming year

European Financial System Governance. CEPS Policy Brief, No. 106, 14 June 2006

[From the Introduction]. The intention of this paper is not to make another assessment of the FSAP [Financial Services Action Plan] and its impact,1 but rather to address two subjects. First, we discuss whether decentralisation is here to stay. This structure has its advantages, but creates some unsound asymmetries. Second, there are concepts which, in the aftermath of the FSAP, are beginning to be widely used, but need clarification. Before discussing these issues, we briefly review some facts and patterns of evolution in the European financial system

Financial Market Data and MiFID. ECMI Policy Briefs No. 6, 30 March 2007

The opening-up of the market for equity market data raises the question of whether data will be sufficiently consolidated and of high enough quality post-MiFID, or whether it will become too fragmented, thereby hindering price transparency and the implementation of best execution policies. This policy brief outlines the market for financial market data, the provisions of MiFID and the implementing measures regarding financial data and data consolidation. It also looks at the approaches taken by CESR, the FSA and the US authorities. It concludes that markets should be capable of adapting and that additional licensing requirements, such as those proposed by the FSA, are in fact premature and act as a barrier to the single market. Nor would a US-style monopoly consolidator be needed in this case

Credit Rating Agencies: Scapegoat or free-riders? CEPS ECMI Commentaries No. 20, 9 October 2008

This Commentary by CEPS Chief Executive Karel Lannoo examines the draft directive issued for consultation by Commissioner Charlie McCreevy in July 2008, which proposes very detailed and prescriptive regulation of the activities of rating agencies in the EU. While acknowledging that policy-makers had no choice but to take action, Lannoo asserts that the draft raises fundamental questions about the form of the regulation and its impact on the industry and the markets. Namely: 1) Confronted with a globally concentrated industry, can the EU act alone? 2) Considering the fragmentation of the EU market, how will the regulation be applied? 3) Is functional regulation, as proposed by the European Commission, appropriate, or is more objective-based regulation needed? 4) What side effects may be caused by statutory regulation of CRAs

EU Federalism in Crisis

In the run-up to this week’s European Council, Karel Lannoo offers his assessment of what has been put on the table so far in response to the euro crisis – and what more needs to be done. He starts with an assessment of the measures taken in the ‘six-pack’ and the debate on the Euro-plus Pact and then addresses some operational elements of the European Stability Mechanism and the question whether the EU is, as often alleged, a transfer union. The CEPS Chief Executive concludes his brief by proposing a pragmatic agenda of items on which the EU could advance towards a more federal economic union.

Europe’s New Post-Trade Infrastructure Rules. ECMI Policy Brief No. 20, 8 November 2012

After more than a decade of indecision, the EU is finally now set to implement a consistent regulatory architecture for clearing and settlement. Following the agreement on a European market infrastructure Regulation (EMIR), the European Commission has proposed harmonised rules for centralised settlement depositaries (CSDs), while the European Central Bank is moving forward with its plans for a central eurozone settlement engine. This paper analyses three components of the new post-trade infrastructure measures: 1) the regulatory framework for and supervision of central counterparties under the new EMIR legislation, 2) the authorisation requirements of trade repositories and 3) the draft CSD Regulation and the progress with the ECB’s Target 2 Securities project. It then discusses the impact of the new rules, and argues that, analogous to the unexpected impact of MiFID on trading infrastructures, a similar EMIR revolution may be on its way