Esma’s Verena Ross: protecting the EU’s financial markets

Verena Ross struggles to lay her finger at the toughest time of her nearly 30-year managerial career that began in the UK before taking her to mainland Europe as the regulator’s chief executive the EU’s new market in 2011 and its presidency in 2021.

Was it her first days in Paris, when the European Securities and Markets Authority was trying to expand from a 35-person startup that simultaneously controlled the EU’s markets through a unprecedented sovereign debt crisis?

Or when the Covid-19 pandemic hit, and Ross faced the same practical problems as the leaders of other institutions, while trying to ensure that the European market was not confined. in the most unusual and unpredictable situations?

She couldn’t really tell, and she clearly didn’t have much time to consider it. The German-born no-nonsense manager is more of a hands-on type, and in any case, her most challenging times may be ahead.

Esma has the impossible task of dealing with the fallout from Brexit by maintaining good relations on a daily basis with the UK’s supervisors and attempting to guide the explosive political series on where Trading on EU markets should be through – or intermediated – by companies such as UK LCH and pan-European stock market operator Euronext.

Ross’s powerful 300-man agency is also one of the flagships for Europe capital market union program, a large yet elusive political project aimed at replicating the United States’ achievement of moving trillions of dollars from households and savers into debt and equity held by corporations. companies of all forms and sizes.

Esma is currently trying to set policies for some of the most complex areas of the traditional market, while making its mark in new areas like sustainability, where it leads the way in transparency and cryptocurrencies. where it will soon assume responsibility for direct supervision of parts of European industry.

“One of the challenges with these jobs is that, how broad is it, you need to know the content of what’s going on, because you never know where the next problem might come from,” she said. where. “But inside that, you obviously need to prioritize. . . core topic at any given time. “

In October, Esma revealed its strategy for the next 5 years, ticking the traditional boxes in promoting efficient markets and maintaining financial stability, as well as modern strategies including enable sustainable finance, facilitate innovation and use data.

The 54-year-old tries not to dig into the weeds like a natural instinct would take over, reminding herself that she is not the technical expert she used to be the bank’s early analyst. UK Central. She is also conscious of not “ignoring” her successor, Esma chief Natasha Cazenave, whom she praises beyond words. She says her new job as president is “quite different” from her old job.

“I was really focused on chairing the board meeting, setting the agenda, trying to shape the strategy and vision of where we wanted to go, and also focusing a lot on being the chair. external representation of authority,” she said.

Esma must balance the priorities of the EU and its member states with the regulator’s core objective of protecting the European market. Clearing, a once obscure part of the market infrastructure that has become emblematic of the EU’s attempt to sever ties with financial hub London, is an area in which the two masters Ross’s seems to be in conflict.

EU politicians, led by financial services commissioner Mairead McGuinness, have insisted that clearing operations must move from London, where it is mostly done now, to the EU. In April, McGuinness likened the situation to cutting the EU’s excessive reliance on energy from Russia, commenting that nothing more than London’s total surrender would please Brussels. The financial services industry, from London to Frankfurt to Paris, argues that moving clearing wholesale away from the UK capital would increase both risks and costs.

“Our approach revolves around identifying where there are areas that rely too much on [on London], specific systemic risks that we need to deal with,” says Ross, who describes himself as a “dedicated European”. “It is about making sure that there are alternatives in the European Union rather than a binary option [between London and the EU] . . . I think it’s important to have a strong clearing infrastructure in Europe and a clearing capacity in Europe for these systemic tools and services.”

For now, London continues to do most of the EU clearing and Ross said day-to-day relationships with UK authorities are “working pretty well”. What can be done to make the relationship better? “I think there is a broader question, which is not really within our mandate, about how the relationship between the UK and the EU, politically, develops but that is not really the case. let us comment,” she said, presenting “just getting started with it” the approach she has taken in the six years since the Brexit vote, although she describes the UK’s decision He is something that makes her “very sad” as someone who has spent her formative professional years in London.

The regulator, who studied Chinese and economics at the School of Oriental and African Studies in London, also took a similar diplomatic stance on the capital market union, arguing that “important steps have been taken.” do”, although she admits that the concept can be “elusive” for the average person.

From the financial crisis to Brexit and Covid, many of the issues that made headlines during Ross’ time at Esma were the ones her agency had to respond to. Sustainability and cryptocurrency regulation give Ross and her team a chance to stay strong.

Esma is at the vanguard of the fight against greenwashing, including developing a European framework for sustainability claims last year.

Ross believes her agency – one of many looking into climate change issues in the financial services sector – “has an important role to play. . . in ensuring that retail investors ultimately understand what they are buying “due to “great demand” for green products.

“It’s not easy because it’s a developing picture with different pieces of law coming together pretty quickly,” says Ross. Esma is also restricted because it is “not a direct supervisor” and therefore has to rely on national authorities to follow its guidance, as Esma has done in much of her work. me.

Esma over the past few years has publicly warned European investors about the dangers of putting their money in cryptocurrencies. New European Digital Asset Law, Micagives Ross’ agency a more direct role by tasking it with establishing a comprehensive framework for crypto-asset management, although the plan is for Esma to license directly to service providers. Europe’s largest crypto asset case has finally been shelved.

Three questions for Verena Ross

Who is your leader hero?

There isn’t a single person. I learned a lot from the people I worked with and I learned different things from each of them. . . Leadership is such a personal thing.

What would you be if you weren’t the leader/president?

I want to be an archaeologist. So I even did six months of research in archaeology, and then I was a little worried that I might collect dust in a museum.

What was your first leadership lesson?

As you transition from a technical expert to a leader, you must resist the temptation to delve too deep into everything. You need to make sure you understand enough to ask the right questions and listen to the answers of experts, but not technical experts.

Ross is no stranger to breaking new ground in the financial sector. When she was appointed to lead Esma, having a woman in such a role was still unusual enough for an MP. describe her words as “sweet and soft” during a public hearing.

By the time she was appointed president in 2021, the world had changed and she joined the growing ranks of women leading major financial institutions, such as Christine Lagarde at the Bank of China European Central Bank and Elke König at the eurozone’s sole settlement council. She is aware that gender is “something people consider when making certain choices” and considers its role in her life.

“I hope I got the position [I’m in]not only because I am a woman, but also because I have certain experience and knowledge that people appreciate and they believe I can do the job,” she said.

“It was not my first motivation to be recognized as a female leader,” she later added when asked about her hopes for her legacy. “What I want to be recognized for is to be a fair and inclusive leader, bringing people together to achieve their best.”


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