Brussels, 12/02/2015 (Agence Europe) - The European Federation of Building Societies (EFBS) has criticised, “in the strongest terms”, the draft Green Paper of the European Commission aiming to launch the debate on a capital markets union, to be set in place by 2019.
“A key element of this plan is the intention to increase the shift to private household funds from bank deposits to capital markets through targeted investments”, the European organisation notes in a press release. “Securitisation markets are not a reasonable alternative” for medium and low-income households, states its Managing Director, Andreas J. Zehnder, who argues that “the Commission should support people's desire for safe investments instead of luring them into financial adventure”.
On Wednesday 18 February, the Commission is to present its Green Paper, aiming to gather the opinions of the stakeholders on the European initiatives to be taken in order to facilitate the irrigation of the economy via the financial markets, as banking intermediation represents nearly 75% of the financing of businesses in Europe. One of the most mature dossiers concerns revitalising the financial technique of securitisation, with the Ecofin Council having called upon the Commission to present a legislative text making it possible to promote quality and transparent securitised financial products, whilst learning lessons from the financial crisis of 2008 as a result of sub-prime mortgages (see EUROPE 11246).
Zehnder goes on to say that he is “mystified by the Green Paper's implicit allegation that savings schemes with the purpose of financing one's own home demonstrate insufficient productivity”. Schemes of this kind are a “necessary prerequisite for the long-term stability of housing finance markets, thus providing stability for the real economy as well”, he stresses. (Mathieu Bion)