CEPS: Time to re-energise the EU’s capital markets
30 November 2022
Building investable and competitive ecosystems (authored by Apostolos Thomadakis / Karel Lannoo / Niamh Moloney)
Seven years since the launch of the Capital Markets Union (CMU), EU
capital markets have neither significantly developed nor become more
integrated. Instead, European capital markets are highly fragmented,
market financing is limited, while the competitiveness of the financial
services sector (and the EU’s economy in general) has been battered.
A new study ‘Time to re-energise the EU’s capital markets’,
now calls for a different approach to create a more balanced financial
system, which draws more efficiently on market finance and prioritises
local capital market development measures.
Formed in April 2022 to examine how to address these failings, a
Round Table of eight industry leaders representing market operators and
infrastructures, banks, an asset manager, and a corporate entity active
in the beverage industry, came together over a period of six months. The
study is the result of their discussions, deliberations and research.
To build investable and competitive capital markets, the study proposes that:
- Capital markets development should pave the way for integration measures as an EU policy objective, by acknowledging the diversity in Europe’s capital markets.
- Retail investors should be at the centre of the EU’s narrative for capital markets with industry and policymakers providing efficient solutions for long-term savings.
- To foster efficiency and scalability, the EU needs to enforce mutual recognition and interoperability in capital markets, recognising that harmonisation is no panacea.
- Remaining as open as possible and guaranteeing stability and continuity
in the regulatory landscape, as well as ensuring consistency in
supervisory outcomes, will make Europe more attractive and competitive.
To ensure Europe has all the tools available for achieving these ambitious goals, the study recommends:
- The development of a comprehensive set of KPIs on the competitiveness of EU actors and the attractiveness of EU capital markets vis-à-vis non-EU markets.
- The creation of a high-level markets advisory/consultative group that will regularly convey its findings to policymakers.
- A ‘funding escalator’ to monitor local/regional market ecosystems, an ‘investment riskometer’ to assess channels for retail and institutional investment participation in markets, and an efficient securitisation market to make loans more marketable, free up banks’ capital and boost demand for securitised products.
Full paper
CEPS
© CEPS - Centre for European Policy Studies
