Written by 10:00 TOP-NEWS

Capital markets union: dream, illusion or coming reality

At the international capital market forum organised by EFFAS and DVFA, experts discussed concrete measures for the realisation of the European Capital Markets Union. Thorsten Müller, Chairman of the DVFA Executive Board, called for more initiative from the EU Commission in order to catch up with the USA and Asia

The European Federation of Financial Analysts (EFFAS) and the German Association of Financial Analysts and Asset Managers (DVFA) jointly organised an international capital market forum on the topic of “European Capital Markets Union – Dream, Illusion or Coming Reality”. Almost 70 participants spent a day discussing with speakers and organisers how to “fill this generic political topic with concrete actions”.

“Far too little has happened since the project was actually launched by Lord Hill in spring 2015,” said Thorsten Müller, Chairman of the DVFA Executive Board. “The gaps in terms of capital market breadth and depth are still very pronounced and the European capital market is even falling further behind the US and Asia. This is particularly problematic in light of the fact that major tasks need to be solved in order to finance digitalisation and the transformation towards a carbon-neutral Europe.”

In particular, highly standardised products such as derivatives and the associated clearing and trading were named as sub-projects that could potentially be implemented quickly, so-called “low hanging fruits”, for a harmonised common European market.

For the stock markets, a broad mobilisation of capital is critical to success so that more new issues find their way back onto the stock exchange. Standardised dividend and profit taxes would have a supporting effect here. There were also vehement calls for a funded pension scheme. Sweden’s “AP7 programme” is regarded as best practice in Europe. This could significantly broaden and deepen the continuous flow of capital to the equity markets, which is independent of economic cycles.

The securitisation markets are also clearly lagging behind the USA. The Capital Market Forum called for the increased securitisation of SME loans in order to relieve the burden on debt financing partners via the capital market.

In conclusion, Thorsten Müller emphasised that SCOPE Ratings was the first European rating agency to be accredited by the European Central Bank: “This will ensure more competition among the rating agencies and should not be underestimated in terms of the importance of the European capital market. This fulfils at least one important building block for a future capital markets union.”

To summarise the EFFAS and DVFA Capital Markets Forum, it can be said that many of the building blocks for a capital markets union are on the table – they must now finally be consistently implemented by the EU Commission following the new elections to the European Parliament.

Source: DVFA press release from 17 June 2024

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