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The European Union's competitiveness and prosperity depends on an optimal allocation of resources, particularly savings, within the single market, yet EU capital markets remain fragmented. EU rules are mostly set out through directives, leaving Member States' supervisory authorities latitude in their interpretation and application of the rules. Therefore, although rules are enacted at EU level, the resulting uneven supervisory environment is considered a major cause of fragmentation of EU capital ...

The EU has developed a differentiated system of financial supervision, distributing powers among bodies such as the ECB, ESMA, SRB and AMLA. Each authority operates with distinct mandates, governance structures and accountability mechanisms. Their combined roles illustrate how the Union balances centralisation, coordination and independence to address systemic risks, cross-border challenges and financial innovation.

This paper analyses the ECB’s treatment of sovereign debt in its collateral framework and market stabilisation instruments. The ECB’s treatment of sovereign debt sits at the core of Europe’s financial stability, yet its legal mandate leaves the central bank with wide discretion. This paper analyses the political stakes and design choices in the ECB’s sovereign debt policies and how the European Parliament can respond. The European Parliament can enhance the democratic legitimacy of the ECB’s approach ...

This paper is prepared in view of a regular public hearing with the Chair of the European Systemic Risk Board (ESRB), Christine Lagarde, which will take place on 3 December 2025. It covers the ESRB’s report on crypto-assets and decentralised finance, recent conclusions from the ESRB General Board meeting, the financial sector’s current risk outlook and broader systemic-risk and financial-stability concerns. The paper also analyses the role of money market funds (MMFs), the Commission’s proposed securitisation ...

This briefing analyses the establishment of the European Anti-Money Laundering Authority (AMLA) as a cornerstone of the EU’s 2024 Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) legislative reform. As AMLA formally began its operations in the summer of 2025, a key question will be how effectively the Authority translates the new rulebook into consistent supervisory practice across the Union. The briefing examines how the new framework addresses long-standing regulatory fragmentation ...

In her mission letter, the Commission President had requested Commissioner Albuquerque to establish a structured dialogue with the competent committee in the European Parliament. This is the first such dialogue to take place in the ECON Committee which is the competent committee for most files entrusted to the Commissioner for Financial Services and the Savings and Investments Union. The present briefing reviews the input received from the Commissioner for this exchange of views (i.e., her 2025 Annual ...

This study quantifies the impact of geopolitical risk on euro area banks using the 2025 EU-wide stress test, the first to include an explicit geopolitical scenario. Comparing outcomes with earlier stress tests, we find that geopolitical shocks measurably erode capital ratios, with smaller and less diversified banks most affected and considerable heterogeneity across countries. The results highlight how stress testing can capture structural vulnerabilities and inform supervisory responses through ...

On 19 March 2025, the European Commission presented its communication on the Savings and Investments Union (SIU), outlining a strategic framework for future financial services initiatives. This briefing places the SIU in the context of the Capital Markets Union (CMU) launched in 2015 and reviews progress to date using selected indicators from the Commission’s own monitoring framework. Despite extensive legislative efforts, several indicators show only limited improvement, echoing the conclusions ...

This study examines the impact of Conditionality Regulation measures on final recipients and beneficiaries of EU funds in Hungary and draws lessons from this experience. It explores the concept of ‘smart conditionality’ and potential avenues to implement it, including possible changes to the legislative framework governing implementation of the EU budget.