Response to the Public Consultation on Building a Capital Markets Union
CEEP Response to the European Commission’s Public Consultation on Building a Capital Markets Union.
Summary
We support the essential intentions, goals and most measures mentioned in the Green book “CMU” and we see a lot of chances for more integrated and liquid capital markets in the EU with high standard products (i.e. standardization of covered and corporate bonds markets, support of the ELTIF, facilitation of private equity and risk capital markets, private placements, etc.). Financing of the European economy should be diversified more broadly and capital markets should play a greater role.
A harmonized credit scoring system and a Eurpean database on SME asking for credit could provide for better access and standarization of SME credit information. This could ease the (direct) intermediation of IORPs capital to credit searching companies.
We support measures for the European Long-Term Investment Fund, as the ELTIF has potential for the “democratization” of longterm investments (due to smaller amounts of invested capital per investor, be it a retail or institutional investor). A stricter practical separation of retail ELTIFs and those for institutional investors would be appropriate, as there is no legal separation envisaged in the current compromise on the ELTIF Regulation. The management fees and the focus on distribution of retail products makes them unattractive for institutional investors. ELTIFs might be treated on national basis with favorable tax treatment which is often on ly applied to open-ended funds. We want to stress that a lower SCR charge under Solvency II alone does not stimulate the ELTIF for IORPs.
We support many measures suggested in the green book but want to make some additional macroeconomic comments to put the green book into a broader perspective. Central diagnosis and assumption of many suggestions of the green book is that the low growth potential of the EU as well as low financing of SME and infrastructure projects is rooted in problems of the supply and intermediation. The answers are the European Fund for Strategic Investments (EFSI) and the Green Book on Capital Market Union. The EFSI shall deliver a short-term investment offensive for the areas of infrastructure investments, renewable energies, research & development and education.
The insufficient intermediation of capital within the EU shall be captured by the green book delivering measures for creating a capital market union. But we want to question if the problem is really to be found solely on the side of capital supply and intermediation.
