European Central Bank President Christine Lagarde proposed granting more powers to the European Union’s securities watchdog, turning it into the regional equivalent of the US Securities & Exchange Commission.

Supervision of capital markets “remains largely at the national level,” Lagarde said in a speech at a conference on Friday. A European agency with “a broad mandate including direct supervision,” could help address that problem.

“Creating a European SEC, for example by extending the powers of ESMA, could be the answer” she said, referring to the European Securities & Markets Authority.

The EU is working to forge closer ties between its financial markets and make it easier for investors to deploy capital to finance the overhaul of the region’s economy. While Paris-based ESMA has spearheaded the implementation of certain projects including the bloc’s Mifid rules, it lacks the broad enforcement powers of other European authorities such as the ECB’s bank supervision arm.

“ESMA welcomes the call for strengthening EU capital markets and also the suggestion for further EU-level supervision,” a spokesperson for the agency said by email.

Lagarde cited the challenges of deglobalization, demographics and decarbonization and compared the funding needs to the investments in US railroads in the 18th century, which outstripped banks’ lending capacity. Drawing another comparison to US history, Lagarde said the creation of the SEC in the 1930s “played a pivotal role in suppressing state efforts to fragment securities markets.”

The EU will also need a “single rulebook” for its financial markets, she said. Combined with a unified watchdog, “that would empower private entities to expand their ambitions in fostering high-growth private investments.”

--With assistance from Sonja Wind, Alexander Weber and Lyubov Pronina.

(Updates with ESMA comment in fifth paragraph)