ELEC position paper: Why EU Capital Markets Union has become a “must have” and how to get there – ELEC Group of Wise Persons

(Graham Bishop was a member of this Group, and an author) 

Its report highlighted the need for CMU - with five concrete proposals for action by EU policymakers on insolvency proceedings, securitisation, stimulating retail investment, expand ESMA's powers, check feasibility of a globally significant `safe asset'. 


European League for Economic Co-operation

(ELEC  is a network of European entrepreneurs of goodwill, aimed at putting timely intellectual pressure on European decision makers to further economic integration in Europe. It acts in complete independence from national or private interests, public authorities or any pressure groups.)

Executive Summary

Five proposals for policymakers
1. Harmonise the key elements of corporate insolvency proceedings and consider adopting an opt-in regime based on international standards, perhaps by “enhanced co-operation” among a willing group of Member States
2. Create the conditions for securitisations to become a complement to bank finance
3. Stimulate retail investment via an array of actions including tax incentives and more auto-enrolment in pension funds
4. Empower ESMA to become the supervisor of wholesale capital markets via joint supervisory teams with national competent authority (NCA) staff
5. Investigate the feasibility of developing the ultimate High Quality Liquid Asset for financial institutions – a “safe asset” in the form of a Eurobill fund

Five reasons why CMU has moved from being `nice to have’ to `must have’:
1. Europe’s green and digital ambitions require more private capital and a more efficient deployment of the existing stock
2. Efficient financial markets with modest asset management fees can produce and protect wealth for ageing populations
3. Mature capital markets provide cheaper and more diversified sources of funding, spurring innovation and economic growth
4. Developed capital markets promote Europe’s strategic autonomy
5. Deep and integrated capital markets strengthen financial stability by facilitating risk-sharing, reducing the strong reliance on bank finance and pricing risks efficiently

more at ELEC-LECE