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18 July 2018

Financial Times: EU urged to ‘redouble’ capital markets union push as Brexit looms

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A group of European countries are urging the EU to “redouble” flagging efforts to build a single market for capital, warning that Brexit and looming EU elections mean that “time is not on our side” to drive forward a project aimed at increasing financing opportunities for companies.

Finance ministers from eight countries including the Netherlands, Ireland and Finland, have signed a joint statement saying that the EU’s project to build a Capital Markets Union, where fund managers and other investors would be able to operate across the bloc more easily, was “essential.”

They said that the plan had become “all the more important” because of Brexit, which means Europe’s largest financial centre is leaving the EU, with potential knock-on effects on companies that have up to now relied on the City of London for their capital-raising needs.

The statement, circulated to other capitals and seen by the FT, is the latest step by a group of northern EU countries, dubbed “the new Hanseatic League” by diplomats, to try to shape EU financial and economic policy.

The group brings together some of the EU’s more economically liberal countries which are concerned that the departure of the UK, traditionally their greatest champion, means they need to co-ordinate their efforts.

The eight countries — which also include Denmark, Estonia, Latvia, Lithuania and Sweden — said that the May 2019 EU parliament elections, which will shut down legislative work in Brussels for several months, mean that policymakers should “target and prioritise” certain important CMU measures that can realistically be completed in the time that remains.

The group’s shortlist includes an overhaul of regulatory rules for investment banks and brokerages, as well as efforts to build a pan-European market for covered bonds. Initiatives to bolster the fintech sector and sustainable finance are also seen as priorities. [...]

Full article on Financial Times (subscription required)

© Financial Times

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