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17 March 2017

CEPS: How close are we to a Capital Markets Union?

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This year will be crucial for the successful implementation of the CMU Action Plan. Nevertheless, the impact of Brexit and the French and German national elections on CMU remains to be seen. It appears that the goal of completing the Capital Markets Union by 2019 is an increasingly remote one.


The Commission’s flagship initiative of the Capital Markets Union (CMU) aims to unlock funding for capital markets and find ways of linking investors and savers with growth. A number of very disparate measures will, it is hoped, have a cumulative but significant impact on the creation of a single market for capital. By the end of 2017, the Commission expects to have finalised and implemented the first phase of CMU measures. Some of these important measures include: an EU framework for simple, transparent and standardised (STS) securitisation; prospectus rules that facilitate access to capital markets and generate more, but less costly, financing opportunities; and improvements to the current venture capital and social entrepreneurship regulations (EuVECA/EuSEF).

Given the Commission’s priority to accelerate CMU, much more remains to be done. This year will be an exciting and intense one for prospective regulation, which will lead to the second phase of CMU actions. For example, in 2017 we expect more work on: business insolvency (early restructuring and second chance); preferential tax treatment of debt over equity; capital charges to infrastructure companies (Solvency II); and favourable loan enforcement regimes to SMEs (Capital Requirements Regulation and Directive). This is not enough, however. Further priorities such as the development of a personal pensions framework, an action plan on retail financial services, the development of a comprehensive European strategy on sustainable finance and the develop [...]

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