On 30 September 2015, the European Commission published its Capital Markets Union Action (CMU) Plan. The aims of the CMU are to strengthen the links between savings and growth through creating a single market for capital. One of the key driving ideas behind the initiative is that more integrated capital markets will lead to efficiency gains and support Europe’s ability to stimulate investment and create jobs.
Following from wide consultation earlier this year and own analysis, the Commission will take forward actions in the following priority areas:
- Providing more funding choices for EU businesses and SMEs.
- Ensuring an appropriate regulatory environment for long term and sustainable investment and financing of Europe’s’ infrastructure.
- Increasing investment and choices for retail and institutional investors.
- Enhancing the capacity of banks to lend.
- Bringing down cross border barrier and developing EU-wide capital markets.
In the short term the Action Plan cover key measures to: relaunch high-quality securitisation; promote long-term investment in infrastructure; revise the Prospectus Directive to make it easier and less expensive for small and medium-sized companies to raise capital. The Commission has started two consultations on Venture Capital Funds and on Covered Bonds. Finally, in line with the principles of Better Regulation, the Commission is also launching a call for evidence on the cumulative impact of financial legislation — to make sure that it is working as intended without (for example) overlapping reporting requirements or inconsistencies between the various laws.
Nick Mabey, CEO of E3G said:
“A growing number of investors are aware that current business models and wider economic activity that assumes unlimited natural resources are not sustainable. Going forward the CMU does need to include options to identify and manage these risks as part of the CMU process.”
Ingrid Holmes, Director at E3G said:
"The Commission’s move to link the CMU to meeting EU 2030 climate targets and delivery of sustainable development goals is a smart one. As the agenda unfolds it will be important that sustainability issues are mainstreamed through the initiative – not treated as something to add on at the end.”
Nick Mabey, +44 (0) 7949 768 771, email@example.com