Experts pointed to the excessive fragmentation of capital markets at a conference entitled ‘Did the EU miss the Brexit opportunity in financial services?’ at the annual meeting of the specialist European think-tank Bruegel on Tuesday 6 September.
Andrea Sironi, Chairman of the Board of Generali, believes that the efforts should not be made by the European Commission, but by the Member States.
“I think that the European Commission has been very committed into setting up the Capital Markets Union, especially through the 2020-2021 Action Plan. Between the communication and the package, all relevant measures are clearly set out. There is probably a need for more drive and more momentum on the part of the Member States in this respect”, he suggested.
For Margarita Delgado, Deputy Governor of the Bank of Spain, the fact that there are different structures with different regulatory chains, legal frameworks and practices fragments the market.
“In my view, the big issue is whether there is a business case and whether there is some kind of good and profitable business plan. That is the real thing”, she explained.
“If we look ahead to 5 or 6 years of negative interest rates, the only options to grow and remain profitable are of course to reduce costs, and costs are more important than mergers”, she added.
The experts also noted strong competition between European markets, but also with UK markets, although the UK still applies EU rules. However, the UK regulation will change soon (see EUROPE 12997/22).
The issue of market supervision was also discussed. For Sironi, convergence in monitoring means that there is a lot of need for comparison, note-taking and coordination.
“At the moment, to be very frank with you, I don’t really see much appetite in our negotiations to make the European Securities and Markets Authority (ESMA) the EU supervisor”, he admitted.
He recommends adopting the same approach as for the banking union, by involving national authorities in the discussions. (Original version in French by Anne Damiani)