The European Securities and Markets Authority: Accountability towards EU Institutions and Stakeholders

This paper addresses the structure, the functions, and the powers of the European Securities and Markets Authority (ESMA), one of the three supervisory agencies created in 2010 in reaction to the financial crisis. ESMA is certainly a more powerful institution than CESR was in its capacity as a Lamfalussy Level 3 committee, although institutional obstacles and the cautiousness of many member States, national competent authorities and market players stopped a stronger centralization of regulatory and supervisory powers. Moreover, the governance of the new body still relies on representation of national competent authorities, so that ESMA can also be regarded as a reinforced network among regulators, besides being an instrument for further Europeanization of supervisory functions. Central features of ESMA are its stronger accountability and, more in general, its enhanced relationships with other key players in financial regulation, such as the European Commission, the European Parliament, EU and national authorities, and stakeholders in general. As is the case for any other supervisor, the regulatory framework that sets the stage for these relationships is paramount in striking the balance between agency independence, on the one hand, and accountability, on the other.