A Capital Markets Union to ease access to corporate finance
The EU commission has launched a public consultation on a possible Capital Markets Union. Among other benefits, this initiative would ease cross-border access to capital for businesses within the EU.
The Chairman of the EU Commission launched the initiative last July. The Commission published a green paper, i.e. a public consultation on the issue, on Wednesday 18 February. The aim is to achieve an integrated and well-regulated Capital Markets Union of the 28 Member States by 2019.
The EU Commission would like to diversify Europe's capital markets. The objectives of a Capital Markets Union would be to:
- direct capital flows towards productive targets more effectively and efficiently than now
- reduce the associated costs to businesses
- accelerate economic growth
Regulatory barriers would be lowered
Finland views the Commission's objectives as ambitious. A Capital Markets Union would lower regulatory barriers between states. Creating such a union would be a long-term project comprising an array of measures taken on several policy fronts.
In Finland's view, the key objectives would be to:
- promote access to capital by enterprises, particularly small companies and SMEs, and enable their listing on the stock exchange,
- improve the cross-border availability of financing
- diversify the currently bank-based capital markets
Bearing on the functioning of the Economic and Monetary Union
In addition, a more diverse financial system would reduce the interdependencies between the stability of national banking systems and the sustainability of public finances. Such interdependencies played a major role in bringing about the recent financial and debt crises. In this way, a Capital Markets Union would have a direct bearing on the functioning of the Economic and Monetary Union.
Finland will draw up its detailed view of the proposed Capital Markets Union during the spring. This will be done based on cooperation between ministries and in consultation with Parliament.
The Commission aims to place an action plan on the reform before the EU Council by next autumn at the latest. The plan will include an evaluation of how capital markets are currently regulated.
Legislative Counsellor Ilkka Harju, tel. +358 2955 30215, [email protected]