(Reuters) – EU leaders will give their political support on April 18 to creating a long-delayed European Capital Markets Union (CMU), which they hope will attract private capital and help fund the region transition to a “green” and digital economy.
Below are the issues that finances ministers for the 27-nation European Union said in March that the bloc and its institutions will focus on to set up a CMU by 2029:
THE COMMISSION WILL * Assess what is holding back the development of the EUsecuritisation market, including the prudential treatment ofsecuritisation for banks and insurance companies, and reportingand due diligence requirements. * Assess how to improve supervision. The aim is tostrengthen financial integration, ensure financial stability,simplify processes and reduce compliance costs. * Propose ways of harmonising different national accountingrules so that corporate information can be compared more easilyacross borders. * Further develop and improve the pan-European pensionproduct (PEPP) to offer all citizens attractive pension optionsand make sure that pension savings are invested productively.
THE COMMISSION AND SUPERVISORY AUTHORITIES WILL * Assess how to cut the regulatory burden and transactioncosts, in particular for smaller market participants.
THE COMMISSION AND EU GOVERNMENTS WILL * Make national corporate insolvency laws more similar,notably in the ranking of claims and insolvency triggers or therules for financial collateral and settlement. * Harmonise listing requirements across European stockexchanges to cut listing costs and make equity and bondfinancing more attractive, and examine how to improve access tomarket information. * Develop simple and cost-effective cross-border investmentand savings products for retail investors.
EU GOVERNMENTS WILL * Provide national tax incentives for companies to raisecapital through shares rather than debt. The bias now, becauseof tax breaks, is towards raising funds via loans. * Support investment in securities by adjusting the waypersonal income tax systems treat long-term retail investmentproducts and capital gains and losses. * Educate citizens about investment options available oncapital markets as an alternative to bank deposits.
THE FINANCE INDUSTRY WILL * Offer easy-to-use and secure digital interfaces for allretail clients to access financial services across the EU.
