EC and Banks Disagree on Capital Markets Union Priorities

Of the five priorities for early action listed in the European Commission’s Capital Markets Union green paper (lowering barriers to accessing capital markets, widening the investor base for SMEs, building sustainable securitization, developing European private placement markets, and boosting long-term investment), bankers speaking at the International Capital Market Forum’s annual conference earlier this month strongly agreed with only one of them: securitization. The other early priorities were not listed by panelists as immediate concerns.

Panelists agreed that it would make sense to approach first those aspects where there is political will and change is already underway, such as the Prospectus Directive review and regulatory relief for simple and transparent securitizations (which was highlighted as the area where benefits would be seen most quickly).

Participants said that the regulatory distinction between market making and proprietary trading also needed to be an early action item for the CMU, though their other priorities, namely the harmonization of EU insolvency laws, were at odds with the immediate priorities listed in the CMU green paper.