After ten years of hard work, EU member states finally reached an agreement on financial market regulation reforms aimed at eliminating market barriers between member states and promoting private capital financing. EU finance ministers agreed on the “Market Integration and Regulation Plan” in Luxembourg on Friday. Under the plan, financial market supervision and enforcement powers will be further concentrated in the European Securities and Markets Authority, headquartered in Paris. Ireland, which currently holds the rotating presidency of the European Union, proposed a compromise plan to bridge the differences among member states. The controversy mainly focused on how to define “important” financial institutions that should be directly supervised by ESMA, and which institutions can be exempted, including a few large institutions such as the German Stock Exchange Group. The reform plan still needs to be agreed upon with the European Parliament in the next few months before it can be officially approved. People familiar with the matter revealed that France and some other member states and the European Commission initially questioned the new compromise plan. EU financial services commissioner Maria Louise Albuquerque said the compromise package weakened the financial market supervisors' governance structure, introduced “unnecessary complexity”, and undermined regulatory efficiency, making ESMA “costly and cumbersome to operate.”

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