The Banking and Payments Federation Ireland (BPFI) has called for the EU to pursue a single harmonised capital markets union during its next term in order to address the bloc’s competitiveness, ahead of elections next month.
The EU’s capital markets union (CMU) is a plan to create a single market for capital across member states with the aim of allowing money to flow more easily across the bloc so it can benefit consumers, investors, and companies, regardless of where they are located.
The EU says the CMU would offer greater choice of funding at lower costs and provide small and medium-sized businesses with the financing they need. The EU Commission first adopted the CMU action plan in September 2015.
BPFI chief executive Brian Hayes said one of the key issues faced by Europe is the level of fragmentation of capital markets, especially when compared to the US.
“In order to increase competitiveness and attract global capital to support the large-scale funding needs of member states, a single, harmonised capital markets union is viewed as essential,” said Mr Hayes.
“The EU has tried before to promote CMU and success so far is limited.”
As part of its policy recommendations for the next EU term, the BPFI said that Ireland is in a prime position to become a significant hub for capital markets activity in the EU.
The BPFI says Ireland is the fifth-largest financial services centre in the EU and the eighth-largest exporter of financial services globally.
“We cannot take the success of banking, payments, and fintechs for granted. Ireland’s position as a leading centre for these services in the Eurozone must be protected,” said Mr Hayes.
The BPFI is also calling for a move towards further supervisory and regulatory convergence at EU level. It said this can help to further develop the EU single market in financial services while helping to ensure a level-playing field between EU member states.
Mr Hayes added that it is also critical that the EU looks to revive the securitisation market to support further lending to the European and Irish economies.
“We know that EU governments require €700bn annually to meet climate and digitalisation objectives and getting the securitisation market working is an essential source of new funding.”
