Chris Cummings, Chief Executive of TheCityUK said:
The European Commission’s Action Plan on Capital Markets Union (CMU) is a positive step in realising the ambition to strengthen Europe’s capital markets and make it quicker, easier and cheaper for businesses – in particular for Europe’s higher growth companies – to access funding. More open capital markets are good for business, good for investors and good for savers. As Europe’s financial centre, London and the wider UK has a major role to play.
We are pleased to see that many of the actions identified for progression resonate closely with those proposed by TheCityUK, through the International Regulatory Strategy Group (IRSG) – a body jointly sponsored by TheCityUK and the City of London Corporation – and the industry more broadly across the EU. In particular the immediate priorities of reopening securitisation markets, a review of the Prospectus Directive, and the promotion of long-term finance for infrastructure investment across the EU.
We also very much welcome the review into the cumulative impact of previous regulatory reform as part of the Better Regulation agenda. Financial services have a major role to play in stimulating economic growth and can only do that with appropriate regulation.
The devil will be in the detail of the deliverables outlined in the Plan and with a timeline to 2019, clear implementation plans will be essential to see these workstreams achieved.
TheCityUK has long been championing the critical role that alternative finance can play in complementing bank lending to SMEs and mid-market companies and its potential to drive real economic growth. In a 2013 report, we identified the reopening of securitisation markets and the encouragement of a credit information exchange to provide reliable and comparable data cross borders about SMEs and mid-market companies. We maintain that the latter would be a key tool to facilitate the exchange of information to SMEs looking for finance and for investors seeking details about potential investment opportunities.
Earlier this year, TheCityUK was commissioned by the Chancellor to undertake a review of the European Listings Regime, the outcome of which identified the need to simplify and modernise the way companies list to make it easier and cheaper for growing companies to access capital. We look forward to continued engagement with the Commission as they develop their work in this area.
Many of initiatives outlined to promote long-term finance for infrastructure investment are already underway and we support the recalibration of the regulatory framework via Solvency II for insurers and CRR for banks which will enable greater long-term investment. TheCityUK has previously estimated that EU infrastructure investment needs over the next 15 years will reach nearly £45 trillion – this cannot be met by public investment alone, hence the important role of the industry in bridging the gap.
We welcome the consultation on retail financial services and given the extensive piece of work TheCityUK has already begun in this area, look forward to responding to this. Similarly, we will continue to reinforce the view previously expressed that supervisory convergence can be best achieved by working closely with National Competent Authorities rather than through a single supervisor.