WSBI ESBG
Capital Markets
Providing simple and shorter information to consumers to trigger well-informed decision.
Capital Markets Union
ESBG believes that a new European Commission plan for a ‘CMU 2.0’ should be used to identify and remove burdens presented by bureaucracy with the objectives of ensuring capital markets stability as well as providing capital markets access to all investors.
Identified Concerns
ESBG supports the European Commission’s plan to create a CMU. However, the success of the CMU is not conceivable without a properly functioning lending market. SMEs rely significantly on bank loans for funding. 70% of outstanding SME external funding in Europe comes from banks, and evidence shows that bank lending remains the favourite source of SME financing for the majority of SMEs. CMU is a supplementary vehicle, not a primary path to support SME financing.
Proposed Solutionsand Actions
Making capital market financing more attractive by reducing “bureaucracy”. In the retail securities markets in particular, numerous regulations have been created in recent years (keyword MiFID II, PRIIPs), which lead to a bureaucratization of securities distribution without creating recognizable added value for clients.
Why PolicymakersShould Act
ESBG believes that a policy of complementarity remains the best way forward to create a stronger and more competitive European Union. This should be borne in mind by policy-makers when further designing the CMU. In our opinion, it is equally important to promote the lending capacity of European credit institutions.
Background
A High-Level Forum (HLF) was set up in November 2019 with the mandate to propose independent policy recommendations that would feed into the Commission’s work on CMU. On 10 June, it published its Final Report, with 17 very granular recommendations (many of them including multiple sub-recommendations for action), with a timeline, on what should be done to achieve a CMU.
Our latest content on Capital Markets
State Aid rules for banks in difficulty
The European Savings and Retail Banking Group (ESBG) welcomes the initiative of the European Commission to launch a targeted consultation aiming at reviewing the State Aid rules for banks in…
ESBG supports consumer participation in capital markets
The EU Retail Investment Strategy aims to increase the level of retail investor participation in the EU’s capital markets and ensure that retail investors can take full advantage of capital markets,…
Clear and fair rules for the use of machine learning in Internal Rating Based models
The European Savings and Retail Banking Group welcomes the initiative of the European Banking Authority to discuss the implications of the use of machine learning in the internal rating based models…
Daisy chain of internal MREL
Resolution groups with entities in only one member state should be exempted from the “daisy chain” deduction framework.
Call for evidence on the European Commission mandate regarding the PRIIPs Regulation
In Europe there are many PRIIPs that retail investors can purchase. In the area of structured products (PRIPs) alone, there are more than 1.5 million of them.
ESMA’s review of the MiFID II best execution reports
The RTSs 27 (and 28) currently regulates the best execution reporting by execution venues and investment firms. We understand that the crucial question for RTS 27 reports is if these reports should…
