On 30 September 2015, the Commission adopted an action plan setting out 20 key measures to achieve a true single market for capital in Europe. As part of the Juncker Commission’s key priority of boosting jobs, growth and investment across the EU, the Capital Markets Union (CMU) aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe’s businesses and long-term projects.
As widely announced, the CMU is a medium-to-long term project. However some important early initiatives have already begun. In fact, together with the CMU Action Plan, the Commission unveiled a first set of measures to relaunch high-quality securitisation and new rules amending the Solvency II regime to promote long-term investment in infrastructure. In addition, the Commission will announce proposed changes to the Prospectus Directive before the end of the year, with a view to making it easier and less expensive for small and medium-sized companies to raise capital. At the same time, the Commission has also started two consultations on Venture Capital Funds and on Covered Bonds.
Moreover in line with the principles of Better Regulation, the Commission also launched a call for evidence on the cumulative impact of financial legislation with the aim to identify possible inconsistencies, incoherence and gaps in financial rules agreed over the last five years, as well as unnecessary regulatory burdens and factors negatively affecting long-term investment and growth. This initiative has been particularly welcomed by the industry. In fact, this represent a first great opportunity for stakeholders to bring to the attention of the Regulators all the problems that have been detected during the implementation of the last five year’s avalanche of financial legislations.
The EBF fully endorsed the publication of the Commission’s CMU Action Plan. The EBF highlighted that Europe’s banking sector, with its pivotal financing role, fully supports CMU and is keen to help build a new ecosystem for growth in Europe by cooperating with all stakeholders.
To underline the constructive role of banks in regards to CMU, the EBF is already working together with partners to develop concrete initiatives to unshackle simple and transparent securitisations from the obstacles that impede their revival, notably in the case of SME securitisation.
If European lawmakers are indeed serious about CMU, they also need to recognise the importance of liquidity in financial markets. Proposals such as the Financial Transaction Tax (FTT) and Bank Structural Reform (BSR) are at odds with the objectives of CMU. Dropping these proposals will greatly enhance the chances of success for CMU.