Opposition to the Shift of Stock Exchange Oversight to Paris - Resistance Against the Relocation of Stock Exchange to Paris
In a significant development, the German state of Hesse and its Economy Minister, Kaweh Mansoori, have voiced strong opposition to the European Union's plans to relocate the supervision of the Frankfurt Stock Exchange to the European Securities and Markets Authority (ESMA) in Paris.
Mansoori, Deputy Head of Government and Economy Minister of Hesse, has emphasised the importance of maintaining the supervision of the Frankfurt Stock Exchange within Hesse, citing the familiarity of the Frankfurt Stock Exchange's supervision with the peculiarities of the financial centre. He also highlighted the principle of subsidiarity, which suggests that decisions should be made where they have the most impact. In this case, Mansoori believes that decisions regarding stock exchange supervision should be made where they have the most impact, which is Hesse.
The resistance from Hesse primarily stems from concerns about losing a key financial oversight function from Frankfurt, which is Hesse’s economic hub. Frankfurt is a major financial centre in Germany and Europe, hosting the stock exchange and other important financial institutions. The relocation would mean that the supervisory authority is no longer based in Frankfurt, potentially reducing the city's influence and economic benefits derived from this role.
Boris Rhein, Minister President of Hesse and a fellow CDU member, echoes Mansoori's sentiments, believing that a decentralized control of the Frankfurt Stock Exchange is necessary, especially in economically turbulent times. Rhein also expresses concerns about "remote supervision from the desk," implying a preference for local oversight.
The local government's aim is to maintain Frankfurt’s prominence in the financial sector, preserve jobs, and influence over regulatory decisions related to the stock exchange. This resistance reflects broader concerns about the decentralization of financial supervision and the economic impacts on regional financial hubs when such powers are transferred to supranational bodies located in other member states.
Mansoori's stance on stock exchange supervision aligns with Rhein's belief in the necessity of a decentralized control. Mansoori has also made it clear that he does not believe that centralization automatically brings less bureaucracy. Instead, he emphasises the importance of proximity and discretion in the supervision of the Frankfurt Stock Exchange.
The opposition to the EU's plans to centralize stock exchange supervision at ESMA in Paris is not just a matter of principle for Hesse. It is also seen as a threat to the economic success of Germany. If Frankfurt were to lose its status as a leading financial centre within the EU, it could have far-reaching implications for the German economy.
[1] Hesse's Economy Minister, Kaweh Mansoori, and Minister President Boris Rhein (CDU) of Hesse have expressed strong opposition to the EU's plans to relocate the supervision of the Frankfurt Stock Exchange to ESMA in Paris. [2] The opposition revolves around economic, political, and strategic considerations tied to Frankfurt’s status as a financial centre and Hesse’s interest in protecting its economic assets and regional influence within EU financial governance frameworks.
- Kaweh Mansoori, the Economy Minister of Hesse, and Boris Rhein, Minister President of Hesse, have formed a strong opposition to the European Union's plans to move the supervision of the Frankfurt Stock Exchange from Hesse to ESMA in Paris, due to concerns regarding the economic, political, and strategic implications on Frankfurt's standing as a financial hub and Hesse's protection of its regional influence within EU financial governance structures.
- The resistance from Hesse reflects a broader concern about the potential decentralization of financial supervision and its economic impacts on regional financial hubs, particularly when such powers are transferred to supranational bodies based in other member states, as it may diminish Frankfurt's prominence in the financial sector, potentially leading to loss of jobs, influence over regulatory decisions, and broader implications for the German economy.
