The trouble is, the finance industry makes money from the practice. Governments, heavily lobbied by asset managers, insurers, and others who benefit from the kickbacks, pressured the Commission into removing the ban before the text was even officially proposed back in 2023. A final agreement on the proposal still hasn’t happened.
Another proposal, for an EU ticker tape which would publish data on the prices and volume of traded securities in the EU, improving overall price transparency and competition, was hollowed out after — again — pressure from governments lobbied by their stock exchanges, whose business model of distributing that data for a premium price would be threatened by the tape.
Under the political deal on that legislation, a weaker version of the ticker tape with less valuable information will still be set up, but stock exchanges are already forming consortia to bid to run the tape, meaning competition may be diluted.
Those are just two examples of many, but the pattern is clear — new EU initiatives which would deepen capital markets are hollowed out or ditched after governments, in thrall to their national finance industry champions, say no.
The rules
Then there’s the stubborn issue of the rules and who enforces them. Although most agree that having a single rulebook and a single supervisor for EU capital markets actors would make the market more integrated, governments won’t give up their ownership of the rules and their supervision, with high-level summits on the issue ending in stalemate.
They also engage in “gold-plating” — when countries roll out EU rules differently at the national level. This is often to protect national investors or domestic economic interests, a fact that creates barriers for foreign entrants, damaging competition, according to a 2024 report by the Polish capital markets lobby group CFA Poland.