Capital Markets Union: What Will It Take To Be A Success | Professor Pierre-Henri Conac

Received (in revised form) on 11th October 2024 for the Journal of Financial Supervisors Academy Volume I.

Professor Pierre-Henri Conac’s article, The Capital Markets Union: What Will It Take To Be A Success, published in Volume I of the Journal of Financial Supervisors Academy, offers a timely and measured assessment of the European Union’s decade-long effort to build a genuine Capital Markets Union (CMU).

Launched in 2014, the CMU aimed to deepen cross-border capital markets, harmonise financial regulation and reduce Europe’s reliance on bank-based financing. Conac acknowledges that important progress has been made, particularly through the rapid development of the Single Rule Book, which established a shared regulatory framework across the EU. Passporting arrangements for issuers and financial intermediaries have also improved market access across Member States.

However, the article argues that legislative harmonisation alone cannot eliminate divergent supervisory practices. Differences in interpretation between national competent authorities (NCAs) continue to create inconsistencies, particularly under the Market Abuse Regulation (MAR). Conac highlights unresolved questions surrounding the disclosure of inside information and the interpretation of obstruction offences, noting that courts across Member States may still reach different conclusions.

The article also examines the limits of the current supervisory framework. While the European Securities and Markets Authority (ESMA) promotes convergence, it has limited powers to discipline NCAs that adopt differing supervisory approaches. Peer reviews remain resource-intensive, and the governance structure of ESMA itself can make strong corrective action difficult.

Against this backdrop, some policymakers — most notably the European Central Bank — have advocated for greater centralisation of supervision under ESMA. Conac approaches this proposal critically, arguing that political resistance remains high and that centralisation alone would not necessarily deepen European capital markets or encourage SMEs to seek market financing.

Instead, the article advocates for targeted technical reforms, stronger supervisory coordination and incremental improvements to the existing framework. For regulators, issuers and intermediaries operating within the CMU framework, Conac provides a pragmatic and balanced roadmap for the future of European financial integration.

This summary is part of a weekly series curated by Business News Malta, showcasing articles from the Journal of Financial Supervisors Academy (JFSA) Volume I, published September 2025.