Capital Markets Union

March 2017

European Commission

EU’s capital markets disunion – 22 February

Politico’s Fiona Maxwell has written an article expressing scepticism on the progress of the European Commission’s CMU project. She refers to obstacles encountered in the past two years – including Brexit, the resignation of Commissioner Hill, as well as the political gridlocks some of the CMU proposals have encountered in the European Parliament and in the Council (most notably, the securitisation proposal). The project has also been criticised for a lack of coherence, instead bringing together a number of legislative and non-legislative measures from a myriad of areas under a broader capital market umbrella.

Commission publishes report on national barriers to free movement of capital – 27 February

The European Commission has published its report on national barriers to the free movement of capital. This long-anticipated report was already announced in the initial CMU Action Plan from September 2015, and is expected to provide additional political momentum for addressing remaining obstacles to the further integration of capital markets in Europe. The report is the outcome of work conducted by an Expert Group of Member States’ representatives. The main objective of this exercise was to map and propose solutions to national barriers that are either not justified by public interest considerations, or are otherwise disproportionate and that may hinder the free movement of capital across borders within the Single Market. The report is non-legislative and as such, does not commit Member States to any particular course of action. It does, however, propose a set of recommendations that Member States are asked to take forward, and announces next steps. It is evident, from the report, that withholding tax related barriers are a major point of concern. Other barriers identified in the report include poor financial literacy, differing and disproportionate national rules concerning new forms of financing (such as crowdfunding), as well as barriers hindering the development of pan-European pension funds.

European Parliament

Venture capital amendments published, first ECON hearing takes place – 8/27 February

The European Parliament has taken forward its work on the Commission proposal to reform the EU’s venture capital regime, with the publication of a total of 268 amendments to the draft report proposal by the MEP Sirpa Pietikäinen (EPP/FIN) – for further details on the European Parliament’s draft report, please refer to Accountancy Europe’s CMU Policy Update from January. In parallel, a first hearing of the ECON Committee to discuss the draft report and the proposed amendments took place on 27 January. in terms of next steps, a vote in Committee is currently scheduled for 22 March. This will lead to a position of the European Parliament, which will then engage in negotiations with the Member States in order to find a compromise on the proposal. This process is likely to last well into the second half of the year.

Vice-President Dombrovskis attends hearing of ECON Committee, provides update on what to expect next – 28 February

Vice-President Valdis Dombrovskis has attended a hearing of the ECON Committee of the European Parliament, as part of the so-called structured dialogue whereby Commissioners attend relevant Committee hearings to answer MEPs’ questions regarding the Commission’s priorities and plans in a given policy area. During the hearing, the Vice-President delivered a speech in which he highlighted recent progress by the European Commission and applauded the political compromise reached between the Parliament and the Member States on the proposed Prospectus Regulation. He emphasises that the CMU project is entering its second phase, and in particular highlights the Commission’s intention to put sustainable finance high on the CMU agenda. Moreover, the Commission will soon publish a “set of actions” on retail financial services. In addition, the Commission will soon launch a public consultation on the challenges and opportunities that Fintech offers across the board.



ESMA publishes Risk Assessment Work Programme 2017 – 7 February

ESMA has published its risk assessment Work Programme for 2017. The Work Programme provides an overview of the analytical, research, data and statistical activities by ESMA scheduled to be undertaken in 2017. The Programme, notably, stipulates that ESMA is planning to enhance its risk monitoring capacities, generating market descriptive statistics as well as sophisticated risk indicators and metrics on the basis of new proprietary data, to continue its impact assessment activities, and to further enhance its stress testing work.


Other News

Report of the Italian National Dialogue on Sustainable Finance: Italy to push sustainable finance in G7 – 6 February

A recent joint report by UN and the Italian Ministry of Environment puts forward a number of recommendations for improving the sustainable finance system in Italy. The report’s purpose is to improve the integration of sustainability factors across Italy’s financial sector. It argues that there is growing awareness and increased actions by financial institutions across the banking, capital markets, institutional investment and insurance sectors, and identifies barriers that prevent the scaling up of such practice, including mispricing, short-termism, and low levels of awareness and capability. The report recommends, amongst other things, to remove environmentally harmful energy subsidies from the tax system, establish a committee to look into best ways of developing the green bond market, and finding solutions for a resilient national scheme to cover risks deriving from climate-related natural disasters as well as to increase transparency and disclosure on financial markets. Italy’s 2017 presidency of G7 has identified green finance as one of the priorities for a G7 summit taking place in June in Bologna.

The Economics: Europe’s securitisation market remains stunted – 23 February

The Economist argues that securitisation markets in Europe remain weak and fragmented. The article focuses, in particular, on the Commission proposal for the establishment of a new category of “simple, transparent, and standardised” (STS) securitisations with fewer regulatory requirements in Europe. The proposal is under negotiations between the European Parliament and the Council, and finding a compromise will be challenging at best. The article concludes by stating that although especially the European Parliament is sceptic about reviving securitisation in Europe due to it being associated with the financial crisis that erupted in 2008, potential substitutes such as sales of unsecuritised loan portfolios or ‘synthetic securitisations are even scarier options.

Bruegel blog: Brexit should drive integration of EU capital markets – 24 February

A blogpost on the website of the Brussels-based think-tank Bruegel argues that Brexit provides great opportunities for capital market integration in the EU. Brexit offers the other EU-27 countries a chance to take some of London’s financial services activity, but there is also a risk of market fragmentation, which could lead to less effective supervision and higher borrowing costs. The blogpost argues that in order to get the most out of Brexit, the EU financial sector needs a strengthened ESMA,  with significant additional resources and expanded responsibilities.


MEP Questions & Answers

Crowdfunding – 3 February

The European Commission has replied to a question asked by the MEP Ivan Štefanec (EPP/SVK) with regard to crowdfunding. In his question, Mr. Štefanec asks the Commission whether there will be a single set of rules applying to crowdfunding in the EU. In his reply, Vice-President Dombrovskis emphasises that the Commission has faith in crowdfunding’s potential to provide alternative financing for SMEs, but it remains for the time being relatively small and as such requires space to innovate and further develop. Moreover, crowdfunding remains fairly local and consequently there is no case for a EU-level framework for the time being. He confirms, however, that the Commission monitors closely national frameworks and will meet regularly with European Supervisory Authorities (ESAs), national regulators and the crowdfunding sector to stay up to date on developments. He, moreover, states that the Commission has launched a study on the development of crowdfunding in the EU, which is expected to be published during the third quarter of 2017.


Event reports

ECMI/CEPS conference on removing information barriers for SMEs – 8 February

The European Capital Markets Institute (ECMI) and the Centre for European Policy Studies (CEPS) organised a conference in early-February to discuss potential information barriers for SMEs. The conference brought together Ricardo Bonci (Senior Economist-Statistician, ECB), Gerhard Huemer (Director of Economic Policy, UEAPME) and Alexis Marchand (Policy Officer, DG FISMA, European Commission) to discuss solutions for better linking fund-seeking SMEs and finance providers on a pan-European level. The panellists discussed and proposed a number of solutions, including emphasising policies of information sharing on both the demand and the supply side, mitigating security, confidentiality, reputational and financial stability risks, providing harmonised granular data on credit and credit risk as the ECB is currently doing through its Anacredit initiative, and improving the availability of SME information for non-bank finance providers. Mr. Huemer from UEAPME emphasised that SMEs themselves should keep control of the data and be the ones to decide who receives their information.



  • 08/03/2017, What could be the features of the Pan-European Personal Pensions initiative (PEPP)?, PubAffairs, Brussels. Source
  • 23/03/2017, Conference #FinTechEU – Is EU regulation fit for new financial technologies?, European Commission, Brussels. Source
  • 29/03/2017, Workshop on implementing measures for the prospectus regulation, European Commission, Brussels. Source
  • 04-05/05/2017, EU Capital Markets Union: Latest Developments, ERA, Brussels. Source
  • 19/05/2017, European Financial Integration, European Commission and ECB, Brussels. Source
  • 20/06/2017, CMU review, Financial Future, Brussels. Source