The European Commission (the Commission) has published the speech given by Jonathan Hill (Commissioner for Financial Stability, Financial Services and Capital Markets Union) at the Danish Bankers’ Association.
In his speech, Commissioner Hill states that the Commission’s priority is to build a single Capital Markets Union (CMU) that will help money flow through the European Union to where it can be most productive. He also notes that a single CMU would help connect savings effectively to grow, channel investment to projects that need financing, give companies a greater choice of funding and increase the options for people saving for the long term.
Commissioner Hill then discusses some of the feedback that the Commission has received to its call for evidence on the EU regulatory framework for financial services. In particular:
- there is a recurring concern that the EU’s rules could be getting in the way of the diversity of Europe’s financial sector. For example it is argued that the Commission needs to distinguish between the capital requirements imposed on large – bank like – investment firms and those imposed on smaller firms;
- many respondents raised concerns about declining market liquidity, particularly in corporate bond markets and query whether regulation has had a hand in this decline. To get a clearer picture the Commission is undertaking a review of liquidity in corporate bond markets; and
- the burden imposed by the quantity and duplication of reporting requirements is another frequent complaint. Businesses complain that they are reporting and disclosing the same information in different ways to comply with different pieces of legislation. Commissioner Hill will be considering carefully how reporting requirements can be streamlined.
The Commission will hold a public hearing in May 2016 and will publish its responses in summer 2016.