The Council adopted conclusions on the development of
a capital markets union in the EU.
The Council recognised that although EU capital
markets have expanded over recent decades, they remain fragmented
and less developed as compared to those in some other comparable
jurisdictions, in particular in certain market segments crucial for
jobs and growth such as securitisation and venture
capital.
Consequently, it considered that more developed and
more integrated capital markets could unlock investment for
companies and infrastructure projects, attract foreign
investment, contribute to growth and job creation and make the
financial system more efficient, robust and resilient to
shocks.
The Council welcomed the Commission’s
initiative of building a Capital Markets Union (CMU) and the
wide range of issues being considered in this context. It insisted
on the following issues:
- the need to broaden and diversify sources of
financing for European companies, especially SMEs, bearing in
mind the need to create effective conditions for healthy
competition between banks and non-banks in the European financial
system;
- the need to strengthen the equity culture in
the EU and to encourage long-term investment in companies, rather
than rely excessively on debt;
- the importance of focusing on improving bank financing
as well as on developing non-bank financing opportunities for all
SMEs from smaller or larger financial markets;
- the importance of increasing retail investment
and ensuring robust investor and consumer protection;
- the need to consider approaches enhancing access to
intermediated financing for companies as a necessary
complement to the CMU;
- the principles of subsidiarity and proportionality
should be respected in any future related initiative and that
financial market stability should not be put at risk;
- the CMU should encompass all 28 Member States,
while taking account of the various degrees of development of
capital markets and their different levels of size and
integration;
- the process of promoting ESG (Environment, Social and
Governance) investment;
- the important catalysing role of the new European Fund
for Strategic Investments (EFSI)
and of the European Long-Term Investment Funds (ELTIFs)
should be stressed;
- the need to address barriers to the free movement
of capital to ensure that Europe’s capital markets can
compete on a fair basis with other economic areas.
Short-term priorities for action: recognising that securitisation can provide an
effective mechanism to transfer risk from bank lenders to non-bank
operators, the Council called on the Commission to propose a
framework for simple, transparent and standardised
securitisation, building on the numerous ongoing initiatives at
European and international levels, as a matter of priority at
the latest by the end of 2015, including:
- a clear overarching definition of such
securitisations, ensuring consistency of the common key aspects
across different sectoral legislations;
- a sound mechanism for verifying qualifying
securitisations, and areas where these deserve a preferential
treatment, as well as an appropriate calibration
thereof.
The Council also:
- stressed the need to enhance and streamline access
to credit information while keeping the provision of data on a
voluntary basis where justified for certain SMEs, and minimising
the burdens on SMEs in the EU;
- confirmed the need to simplify and streamline the
process for preparing and, where appropriate, approving the
prospectus, ensuring an appropriate balance between
achieving adequate investor protection and confidence and
minimising the burden on businesses.
Medium to long-term action: achieving a CMU will require a broad range of
initiatives aimed at stimulating and matching the supply-side and
the demand-side of finance.
The Council proposed that an ambitious approach is
needed, requiring work to be started immediately. In order to
ensure cross-sectorial consistency, work to prepare the CMU should
carefully evaluate the cumulative effect of legislative changes
since the financial crisis and assess the need for proportionate
measures to:
- enhance liquidity and market making, especially on
asset classes where liquidity has recently diminished;
and,
- improve cross-border investment in corporate debt and
equity securities;
- increase investment capacity in the Union, where
necessary through appropriate adjustments of the prudential
framework for key finance providers, such as insurance companies,
while taking due account of financial stability
considerations;
- remove barriers to marketing and growth of investment
funds and their operation cross border, in recognition that such
funds are a significant source of finance in the EU.
The Council also stressed the importance
of:
- improving 'financial ecosystems' throughout the Union,
in particular through promoting entrepreneurship, improving
corporate governance practices, diversifying the sources of
financing and enhancing financial literacy;
- a fully functioning CMU which should rely on an
efficient, effective and stable investment chain supported by
robust market infrastructures and foster a well-functioning cross
border flow of collateral;
- a long-term structural policy agenda which should go
beyond initiatives in the field of financial services and that
building an effective CMU will also require further analysis of
possible barriers in related areas such as insolvency, securities
and company law;
- enhancing supervisory convergence and ensuring
coherent application of financial regulation across the
Union;
- strengthening the macro-prudential toolkit beyond
banking, and specifically into the areas of investment, securities
and shadow banking.
Lastly, the Commission is invited to consider the full
range of possible actions, taking into account the outcome of its
consultation process, and to elaborate by September 2015 a
comprehensive, targeted and ambitious action plan for building
the CMU.