ContextKeynote by the ESMA Chair at the European Capital Markets Dialogue in Dubrovnik, hosted by the Croatian and Luxembourg market supervisors.
Why it mattersThe ESMA Chair draws a line between smart simplification and deregulation that would weaken investor protection.
- Indiscriminate deregulation could weaken investor protection.
- Proportionality can slide into fragmentation.
- Risks increasingly cross national borders.
- Simplify through smart, risk-focused supervision.
- Use peer reviews and common supervisory actions across Europe.
- Reduce reporting burdens while improving risk detection.
Read the speech summary
1. Simplification built on confidence
Speaking in Dubrovnik at a conference hosted by Croatia's HANFA and Luxembourg's CSSF, ESMA Chair Verena Ross, whose term is ending, echoed the Lamfalussy report's call twenty-five years ago for agile regulation. Beyond the question of courage to simplify, she asked whether policymakers have confidence that simpler rules can still work. Complexity can give a false sense of control and, in an unpredictable world, make the system clumsy and less competitive. She rejected indiscriminate deregulation that would weaken investor protection or stability; the aim is a strong supervisory framework, using quality data, convergence and enforcement, that reaches its goals without ever more detailed rules.
2. The cost of fragmentation
She warned that proportionality must not turn into fragmentation: each exemption or national flexibility may make sense locally, but the accumulated differences impose hidden costs on the whole market, making it harder for firms to expand, investors to find opportunities and Europe to compete. A stronger European dimension of supervision should be seen as an opportunity; it will not erase differences between markets but can make them less of a barrier.
3. A joint undertaking and the 2030 picture
Whatever negotiators decide on the market integration and supervision package, she says supervision stays a partnership that combines national expertise with a European view, built through peer reviews, joint actions, colleges and shared methods. For 2030 she pictures supervision more integrated yet rooted in national markets, digital and data-driven, focused on outcomes, with fewer box-ticking duties, lighter reporting, predictable expectations for cross-border firms and investors confident to take part, moving Europe nearer a genuine single market for capital.