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The European Commission has unveiled
its plans to create a Capital Markets Union.
Philip Smith examines the implications
In February, EU Commissioner
Lord Hill launched a three-month
consultation on his ambitious
Capital Markets Union (CMU). It is
a bold initiative that bids to improve
business access to finance through
deeper, liquid and more integrated
capital markets.
The green paper,
Building a Capital
Markets Union
, sets out the options
that could be available, and the policy
levers that need to be pulled, in order
to create a Europe-wide finance market.
This market would give businesses
and investors greater opportunities
throughout the 28 member states,
irrespective of borders and nationality.
It is ambitious in timing and in scope;
Lord Hill is aiming to develop an action
plan that will put in place the building
blocks for a fully functioning capital
markets union by 2019. That is only four
years away.
Great expectations
The ambition in scope is laid bare in the
green paper. “The direction we need to
take is clear: to build a single market for
capital from the bottom up, identifying
barriers and knocking them down one
by one,” says Hill, who is responsible for
financial stability and financial services
as well as CMU. “Capital Markets Union
is about unlocking liquidity that is
abundant, but currently frozen, and
putting it to work in support of Europe’s
businesses, and particularly SMEs.
The free flow of capital was one of the
fundamental principles on which the
EU was built. More than 50 years on
from the Treaty of Rome, let us seize
the opportunity to turn that vision
into reality.”
The paper sets out four objectives that
the Commission is aiming to achieve
UNLOCKING
INVESTMENT
ILLUSTRATION: IMAGE SOURCE
IAFEI Quarterly | Issue 29 | 46