Home News Verena Ross From Esma: Defending the Eu’s Financial Markets

Verena Ross From Esma: Defending the Eu’s Financial Markets

Verena Ross From Esma: Defending the Eu’s Financial Markets

Verena Ross struggles to keep her finger on the most challenging times in her nearly 30-year regulatory career that began in the UK before being brought to mainland Europe as executive director of the EU’s new market regulator in 2011 and its chair in 2021. Is.

Was it its early days in Paris, when the European Securities and Markets Authority was trying to expand from a 35-person start-up shepherding EU markets through an unprecedented sovereign debt crisis?

Or was it when the COVID-19 pandemic hit, and Ross faced the same practical issues as leaders in other organizations, while also trying to ensure that Europe’s markets did not succumb to the most unusual and unforeseen circumstances?

She can’t really say, and she clearly hasn’t given much time to consider it. The German-born autocratic regulator is more and more sociable, and in any case, may have his most challenging times ahead of him.

ESMA has the ability to maintain good day-to-day relations with UK observers and deal with the repercussions of Brexit by approving trades for the EU market or by trying to guide a politically explosive row by intermediary-like companies. Incredible work. UK’s LCH and pan-European stock market operator Euronext.

Ross’s 300-person strong agency is also one of the flag bearers for Europe’s capital markets consortium program, a grand but hitherto elusive political project designed to channel trillions of dollars from households and savers into debt and equity issued by companies. To reiterate America’s achievement. of all shapes and sizes.

ESMA is now seeking to set policies for some of the most complex sectors of traditional markets while making its mark in newer areas such as sustainability, where it is leading a transparency campaign, and cryptocurrency, where it will soon directly assume the responsibilities for the maintenance of the parts. of Europe’s industry.

“One of the challenges of these jobs is how pervasive it is, you need to know what’s going on because you never know where the next issue might come from,” she says. “But within that, you need to clearly prioritize . . . where the main themes are at any given time.”

In October, ESMA unveiled its strategy for the next five years, promoting effective markets and maintaining financial stability, as well as enabling sustainable finance and facilitating innovation and the use of data to sustain modern people. done.

The 54-year-old tries not to delve as deeply into the weeds as her natural instincts would take her, reminding herself that she is not the techie she once was in her early years as an analyst at the Bank of England. was in a career. She’s also conscious of not “hovering over” her successor as ESMA director, Natasha Caznev, whom she admires. She says her new job as chair is “quite different” from her old one.

“I’m really focused on presiding over the board meeting, setting the agenda, trying to drive the strategy and vision where we want to go, and very much on the external representation of authority as chairman. focusing,” she says. ,

ESMA must balance the priorities of the European Union and member states with the regulator’s main objective of protecting Europe’s markets. Clearing, a once-obscure part of the market infrastructure that has become a symbol of the EU’s attempt to break ties with London’s financial hub, is an area where Ross’s two masters seem to be in conflict.

EU politicians, led by Financial Services Commissioner Mairead McGuinness, have insisted that clearing should move from London to the EU, where it is now mostly done. In April, McGuinness compared the situation with Russia to cut the EU’s over-reliance on energy, comments suggesting that nothing less than a complete surrender of London would affect Brussels. The financial services industry, from London to Frankfurt to Paris, argues that shifting wholesale clearing from UK capital would increase both risks and costs.

“Our approach has been around identifying where areas of high dependency [on London]the specific systemic risk we need to deal with,” says Ross, who describes himself as a “committed European at heart.” Huh [between London and the EU] , I think the important thing is that there is a strong European clearing infrastructure, and it is potential for these systemic tools and services to be evident in Europe.

For now, London continues to clear much of the EU and Ross says day-to-day relations with UK officials are “working very well”. Can anything be done to make the relationship better? “I think the broader question, which is not really in our remit, is how the relationship between the UK and the EU, develops more politically, but it’s not really for us to comment on, Go ahead with the approach adopted in the six years since the Brexit vote, she demonstrates, though she describes the UK decision as something that left her “deeply saddened” by her own in London. Spent early professional years.

The regulator, who studied Chinese and economics at London’s School of Oriental and African Studies, is equally diplomatic about the capital markets union, arguing that “significant steps have been taken”, although she acknowledges that The concept can be “hard to understand”. The average person.

From the financial crisis to Brexit and Covid, many of the issues that made headlines during Ross’s time at ESMA were things his agency had to respond to. Stability and crypto regulation give Ross and his team an opportunity to move forward.

ESMA has been at the forefront of the fight against greenwashing, including last year developing a European framework for sustainability disclosures.

Ross believes that his agency – one of many looking into climate change issues in the financial services sector – “has a key role to play . . . in ensuring that retail investors ultimately understand that they what are you buying” given the “huge demand” for green products.

“It’s not easy because it’s an emerging picture with different laws coming in very rapid succession,” Ross says. ESMA is also constrained because it is “not a direct observer” and therefore has to rely on national authorities to follow its guidance, as ESMA does in most of its operations.

Esma has publicly warned European investors over the years about the dangers of putting their money in cryptocurrencies. Europe’s new digital asset law, MICA, gives Ross’s agency a more direct role, in the establishment of a comprehensive framework for regulating crypto assets, although there is a need for ESMA to directly license Europe’s largest crypto asset service providers. The plan was eventually shelved.

No single person. I’ve learned a lot from the people I’ve worked with, and I’ve learned different things from each of them. , Leadership is such a personal thing.

I wanted to become an archaeologist. So I studied archeology for six months, and then I started to worry a little that I might collect dust in the museum.

When you transition from a techie to a leader, you have to resist the temptation to go too deep into things. You need to make sure that you understand enough to ask the right questions, and properly listen to the answers of experts, but not technical experts.

Ross is no stranger to breaking new ground in finance. Even when she was appointed to lead ESMA, being a woman in such a role was unusual enough for an MP to describe her words at public hearings as “sweet and soft”.

By the time she was appointed president in 2021, the world had changed, and she joined the growing ranks of women leading large financial institutions such as Christine Lagarde at the European Central Bank and Elke König on the Eurozone’s Single Resolution Board. She is aware that gender is “something that people take into account when making certain choices” and is attentive to the role it has played in her life.

“I hope I managed to get to this position” [I’m in]Not just because I’m a woman, but also because I have a certain experience and knowledge that people appreciate and believe I can do.”

“This is not my first motivation to be recognized as a female leader,” she added later when asked about her hopes for her legacy. “What I want to be recognized for is being an impartial and inclusive leader who brings people together to achieve their best.”

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