Representatives of the banks call on the EU to develop an internal capital market

The Banking and Payments Federation Ireland (BPFI) has called on the EU to pursue a single harmonized capital markets union during its next term to address the bloc’s competitiveness ahead of next month’s elections.

The EU’s Capital Markets Union (CMU) is a plan to create a single market for capital between member states with the aim of making money flow more easily across the bloc so that consumers, investors and businesses can benefit wherever they are located. convenient.

The EU says the CMU would offer a greater choice of financing at a lower cost and provide small and medium-sized businesses with the financing they need. The European Commission first adopted the CMU Action Plan in September 2015.

Brian Hayes, CEO of BPFI, said one of the key issues facing Europe is the level of fragmentation of its capital markets, especially compared to the US.

“To increase competitiveness and attract global capital to support Member States’ large-scale financing needs, a single, harmonized Capital Markets Union is considered essential,” Hayes said.

“The EU has tried to promote CMU before and success has been limited so far.”

As part of its policy recommendations for the next EU term, the BPFI said Ireland is well placed to become a major hub for capital markets activity in the EU.

According to the BPFI, Ireland is the fifth largest financial services center in the EU and the eighth largest exporter of financial services worldwide.

What happens at EU level is of great importance to Ireland, both from an employment and growth perspective.

“We cannot take the success of banking, payments and fintechs for granted. Ireland’s position as a leading center for these services in the Eurozone must be protected,” said Hayes.

The BPFI also calls for a step towards further convergence of supervision and regulation at EU level. It said this could help to further develop the EU internal market for financial services while helping to ensure a level playing field between EU member states.

Mr Hayes added that it is also crucial that the EU looks to revive the securitization market to support further lending to the European and Irish economies.

“We know that EU governments need €700 billion annually to meet climate and digitalisation targets and that making the securitization market work is a vital source of new financing.”