The fraud case and the subsequent insolvency of the payment service provider Wirecard has revealed structural and organizational deficits in the supervision of financial intermediaries and markets, writes SAFE Director Jan Krahnen in a current guest article for the Börsen-Zeitung (in German language). The lesson from this must be to create a European Single Market Supervisor (ESMS) similar to the Single Supervisory Mechanism (SSM) based at the European Central Bank, which is above the individual national supervisory authorities:
"An ESMS will ensure that common rules apply in every country, on every stock exchange, on every alternative trading platform, and in banks' securities transactions. This is the prerequisite for a Europe-wide market culture and for international confidence in the rules of the game. In turn, we will urgently need this confidence if the enormous sums of debt that European sovereigns and companies are currently piling up try to find global investors", says the guest article.
According to Krahnen, an ESMS could therefore be the decisive step on the way to a common capital market beyond London in the post-Brexit era.