Boosting Europe's capital markets

The Commission proposes passporting and one-stop shop licensing to apply as well to crypto-assets

Photo: EP Valdis Dombrovskis.

Safeguarding an EU's economic recovery from the pandemic that is green, digital and resilient through more accessible financing for small businesses and bigger companies in Europe is at the core of the Action Plan to boost the EU's Capital Markets Union (CMU), released by the Commission on Thursday.

Valdis Dombrovskis, Executive Vice-President for an Economy that works for People, explained that over the past 5 years, the EU has made a lot of progress with the plan to integrate European capital markets: the Capital Markets Union. Going further in developing our capital markets now, matters for opening more financing opportunities to help start-ups, to help larger companies to thrive, to create more opportunities for Europeans to invest safely for their future, he noted.

He also stressed that going ahead is necessary as now there are 27 national capital markets that are neither fully developed nor fully integrated, but this is particularly important as Europe's biggest financial centre is leaving the single market. “And it's a real problem when you look at, say, the United States, where companies thrive on capital markets. Successful companies tell us they have to relocate because they can't get financing here. That loses us jobs and economic growth.”

Within this plan, the Commission is putting forward 16 initiatives to advance with completion of the CMU. Among them is creating a single access point to company data for investors, supporting insurers and banks to invest more in EU businesses and strengthening investment protection. These initiatives will help Europeans to save safely for their future, to buy the best and cheapest financial products and so that their pensions are adequate and sustainable.

To mitigate the risks connected with digital finance, the Commission adopted on the same day a new Digital Finance Package, including Digital Finance and Retail Payments Strategies, and legislative proposals on crypto-assets and digital resilience.

The first strategy aims to reduce the fragmentation in the Digital Single Market for financial services, giving consumers access to better and cheaper services, and to help European financial firms grow successfully.

We want passporting and one-stop shop licensing to apply in all areas of digital finance that have strong potential, EVP Domdrovskis pointed out specifying that this is already done for crowdfunding and “today we are proposing the same for crypto-assets”.

The Commission’s ambition is to create a European financial data space to promote data-driven innovation that will encourage competition between providers. This is where Europe can become a leader, bringing cutting-edge financial products to consumers and companies, EVP Domdrovskis stated.

As the financial sector is three times more at risk of cyber-attack than other economic sectors and is also the world's largest user of ICT infrastructure, the Commission also presented legislative proposals on digital operational resilience in the financial sector.

The sector of retail payments is fast-evolving, but suffering from market fragmentation. The proposed Retail Payments Strategy introduces measures to bring safe, fast and reliable payment services to European citizens and businesses. It will make it easier for consumers to pay in shops and make e-commerce transactions safely and seeks to achieve a fully integrated retail payments system in the EU.


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