TheCityUK, through the International Regulatory Strategy Group (IRSG), which we co-sponsor with the City of London Corporation, has been working closely with the EU Commission to develop a response to the Capital Markets Union Consultation.
The response highlighted five key priorities that we believe to be the most important for the Commission to deliver a single market for capital that benefits the whole of the EU. These priorities include:
- Calibrating prudential requirements so they appropriately reflect risk, sensitively balance the growth imperative and avoid unintended interactions and consequences;
- Encouraging member states to undertake structural economic reforms, eliminating protectionist practices, promoting convergence in supervisory approaches and instituting a policy framework conducive to investment;
- Sharing best practices about how to make information about SMEs more easily accessible and widely available, and reducing regulatory burdens associated with non-bank finance for SMEs;
- Reviewing how well-served retail investors are across the range of investment products and whether more can be done to ensure that the policy framework does not unduly limit choice and channels of distribution; and
- Enabling investment flows in and out of Europe by facilitating international regulatory convergence,
The response further highlights that the powers of the European Supervisory Authorities (ESAs) are broadly sufficient for them to play an appropriate role in the CMU agenda and that their funding should be commensurate with their remit. The research used in this response will be further analysed in a joint paper being developed with EY, about the corporate perspective of CMU.