Brussels, 31/03/2014 (Agence Europe) - Several financial and business lobby groups are delighted that the European Commission wants to promote long-term financing of the real economy through a wide-reaching action plan published on Thursday 27 March (see EUROPE 11048).
The announced return to conditional securitisation does not seem to be a matter of concern to the industry, despite the damage it caused during the financial crisis.
“Long-term financing is rightly referred to as 'patient capital' given its non-speculative nature. The business community is impatient for its restoration”, stated Arnaldo Abruzzini, General Secretary of EUROCHAMBRES, the European association of chambers of commerce. The European Banking Federation takes the same line, praising the return of securitisation even for small businesses, noting that the performance of European securitised instruments had been “exemplary” with little in the way of losses.
The European Commission's roadmap is accompanied by a draft review of the pensions fund directive. European employers' organisation BUSINESSEUROPE recommends that the European legislator take account of the special nature of pension funds and allow employers to offer pensions with a good cost-efficiency rating. The European Venture Capital Association (EVCA) says that long-term investors, such as pension funds, should not be encouraged to avoid private investment because of inappropriate capital requirements as this would mean that investment needed by European businesses is blocked, as EVCA Director Michael Collins warns.
The Commission will be publishing delegated acts to apply the Solvency II package for insurance to encourage long-term investment. The approach has been welcomed by the industry. The Insurer Europe association recommends that this work be coordinated with that of the OECD and the financial stability committee. European insurers want the Commission to take account of the dangers attached to the capital requirements.
Disappointment for small businesses. One section of the Commission's roadmap is on measures for financing small businesses, which their umbrella group, UAPME, feels do not go far enough. It says the Commission has concentrated on start-ups, but these only make up 1% of small and medium-sized businesses, and anyway the Commission is only announcing vague studies and future consultations at a time when small businesses need millions to be injected in new capital. The Commission has produced a report on crowdfunding, but does little to resolve the issue, regrets UAPME.
The roadmap announces work on public development banks, but this type of bank is already warning the Commission not to impose a standard model for the huge range of existing scenarios and the special nature of their work.
Long-term investors represented by the ELTIF association want the Commission to deal with long-term financing during campaigning for the European elections, to pave the way for getting to work on the issue in the autumn. (MD)