ESMA Chair Calls For A Shift From A “vicious Cycle” Of Stagnation

Verena Ross, Chair of the European Securities and Markets Authority (ESMA), opened the 2025 ESMA Conference in Paris with a call for a bold vision to strengthen the European Union’s capital markets.

“Today’s discussion on ‘Shaping the Future of EU Capital Markets’ is both timely and urgent,” Ross said. “We need to have a collective vision for markets that are resilient in the face of challenges, inclusive in opportunity, and transformative in impact.”

ESMA wants “virtuous cycle” where capital markets drive innovation and attract new investment

Ross highlighted the historic role of capital markets in driving economic growth, from funding industrial advancements to supporting post-war reconstruction. However, she emphasized that Europe’s capital markets remain fragmented and struggle to compete on a global scale.

“Today, our capital markets in Europe remain—undeniably—fragmented and complex,” she stated. “If capital markets cannot efficiently finance innovation and growth, we will struggle to nurture ingenuity and entrepreneurialism.”

Ross called for a shift from a “vicious cycle” of stagnation to a “virtuous cycle” where capital markets drive innovation and attract new investment. She argued that the EU should develop its own vision rather than attempt to replicate the U.S. model.

“A more agile and modern regulatory framework is essential to enhance our competitiveness,” she said, advocating for streamlining reporting burdens and strengthening EU-wide market supervision.

Ross also emphasized the need for greater market integration. “Simply put, a fully integrated market will provide businesses with better access to financing and investors with broader opportunities,” she said.

Another key priority was expanding funding sources beyond traditional bank financing. “EU public equity markets have struggled to maintain vibrancy,” Ross noted, pointing to the need for alternative financing solutions.

She also underscored the importance of retail investor participation, saying that more must be done to make capital markets accessible to citizens. “Encouraging citizens to invest requires offering appropriately incentivized simple, transparent, and easy-to-understand products that meet their needs.”

Ross concluded by calling for urgent action. “Necessity is upon us, and our choice is stark: either keep drifting until a bigger crisis forces our hand or rise to the occasion and shape the future of EU capital markets on our own terms.”