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The European Banking Federation (EBF) is pleased to hear that the Commission appreciates the important role that banks play in financing the economy and is seeking a complementary approach. Risk-averse banking regulation introduced during recent years has made it more difficult for banks to lend to European companies, in particular to small and medium-sized companies.
By broadening the financing options for companies in need of equity investment, including by revitalising securitisation, Capital Markets Union (CMU) can now help unlock the latent growth potential of capital markets.
“It’s exactly this type of policy action that we need in Europe,” says Wim Mijs, Chief Executive of the EBF. “CMU is an excellent example of how policies can boost growth instead of restricting it. CMU is ambitious. I hope the Commission can maintain its resolve to make it work so that these plans can deliver a single European capital market without obstacles. If we want to reap the benefits in five years’ time CMU needs to be pushed now. At our end, banks are ready to play their part.”
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 the simple and transparent securitisations from the obstacles that impede their revival notably in the case of SME securitisations.
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.