Capital Markets

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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.


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.

Read the full position

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