The European stock market regulator ESMA in Paris has important tasks – and has not been the boss since April. Nothing in this situation will change anytime soon, it seems: because of a dispute between the German and Italian governments over the best successor candidate. For a while, Anneli Tuominen, managing director of the Finnish Securities and Exchange Commission, heads the Parisian authority alongside. But in an inflammatory letter to responsible EU finance ministers, she warns that the long vacuum at the top could affect ESMA’s work.
The Parisian institution was founded in 2011 as a lesson from the financial crisis. Its objective is to identify risks for financial markets and to ensure that national stock market regulators apply the rules consistently. In addition, ESMA directly supervises rating agencies in the EU. Dutchman Steven Maijoor’s term as ESMA President ended in March. As of last November, the authority proposed three successor candidates; she sent the shortlist to the EU Council of Ministers, the decision-making body of the member states, and to the European Parliament. EU finance ministers must agree on a candidate, after which the European Parliament must approve the selection.
But nothing is moving forward with the ministers because Germany and Italy are blocked. The German government and the majority of other EU countries would like to see British-German Verena Ross in the post. The 53-year-old economist and sinologist previously worked for the Bank of England and the Hong Kong Securities and Exchange Commission, among others. From 2011 to the end of May 2021, she was Executive Director of ESMA and therefore Deputy of Maijoor. She had to leave the post because it can only be kept for ten years.
Italy and other countries in southern Europe, on the other hand, support Carmine Di Noia. The graduate economist sits on the board of the Italian stock market regulator. The third name on ESMA’s slate of candidates was former Portuguese Finance Minister Maria-Luis Albuquerque, but she is de facto out of the race.
There is no shortage of letters – but there is progress
Finnish financial supervisor Tuominen, who now heads ESMA alongside him, sent his letter of complaint to Andrej Šircelj, the Slovenian finance minister. The country took over the rotating Presidency of the Council of the EU in July – so ministers will chair meetings of their EU counterparts there for six months. In the letter, Tuominen complains about the Portuguese presidency, which ended in June: the Portuguese finance minister refused his request to meet to talk about the malaise, writes the Finn. She asked Šircelj to urgently deal with the election of a successor to the presidency of ESMA. After all, the risks in the markets ESMA has its eye on remain “very high” and the work program for 2021 is ambitious. Without a top replacement, there would be a lack of “strategic leadership”.
CSU MEP Markus Ferber also criticized the suspended game. You throw “a very bad light on the capacity of action of the EU”, estimates the economic political spokesperson of the group Christian Democrat EPP. In the European Parliament’s Committee on Economic and Monetary Affairs, the majority of MEPs apparently support Ross. In addition, Evelyn Regner, the chair of the Women’s Rights Committee, sent a letter to the Slovenian Presidency in which she promoted the German-British woman. After all, women are under-represented at the top of European institutions, argued the Austrian Social Democrat. Her colleague from the Italian group Irene Tinagli, however, stripped Regner: Tinagli heads the economic and monetary committee responsible for the issue and forbids Regner’s interference in an armored letter. There is therefore no shortage of letters – but there is certainly progress.