European Banks Push Back Against Equity Market Intervention

The Association for Financial Markets in Europe (AFME), which represents firms including Deutsche Bank, Credit Agricole, and Citadel Securities, issued the warning following a study by the European Securities and Markets Authority (ESMA). The watchdog had previously suggested that the long-term decline in exchange-based trading could eventually weaken the reliability of benchmark prices.

Regulators remain concerned that the increasing reliance on closing auctions and private transactions—where pricing is less transparent—threatens market integrity. In May, the finance ministries of Europe’s six largest economies proposed stricter transparency requirements and suggested that banks should only handle retail orders if they can guarantee prices superior to those available on public exchanges.

Peter Tomlinson, head of equities trading at AFME, argued that Brussels and London should prioritize regulatory simplification to foster competitiveness. He emphasized that restricting execution venues would limit investor choice and run counter to broader goals of market efficiency. For now, the industry is calling for any future policy changes to be strictly grounded in empirical evidence rather than preemptive intervention.