IFLR Quotes Ezra Zahabi on Federal Approach to EU Legislation

In its article “CMU review hints at federal Europe future,” International Financial Law Review quoted Akin Gump litigation counsel Ezra Zahabi on the possible movement towards a more federal approach to legislation for the European Union, as revealed in a midterm review of the capital markets union (CMU).

The article notes that European Parliament members have expressed a post-Brexit need for European authorities such as the European Securities and Markets Authority (Esma) to have greater supervisory powers.

Zahabi said, “It’s clear the European Commission is moving towards a more federal approach to the EU. The shift towards legislative measures to impose regulatory convergence, rather than Esma advice, is quite a decisive tool.”

She added, “The huge disparity in the skills and understanding of financial regulators between member states has been a big problem for the EU, so it makes sense that the Commission would want to create a stronger more centralised EU regulator.”

Zahabi also noted that a proposed review of the prudential regulation of investment firms is likely another measure to reduce the potential for arbitrage between different types of investment firms within the bloc.