So far, Brussels has identified three main actions to address the lack of funding for long-term projects such as infrastructure, climate change technology, new innovation, R&D and digital technology. According to the Commission, the underlying issues relate to capital flow and how to make sure capital is flowing in an effective way.
Additionally, Brussels is looking into ways to ensure there is not an excessive focus on short-termism, and how to incentivise behaviour that is more conducive to long-term financing. The Commission is therefore considering boosting the securitisation market in Europe, while redefining asset managers' incentives towards long-term investments.
With regards to Solvency II and the IORP II Directive, the Commission stressed that the Green Paper would discuss prudential rules as well as the impact of those two Directives on long-term investing.
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