Capital Markets Union – What’s new?

The Capital Markets Union (CMU) is a plan of the EU Commission that aims to create deeper and more integrated capital markets in the 28 EU Member States.

The CMU aims to break down the barriers that are blocking cross-border investments in the EU and preventing businesses, particularly SMEs, from getting access to finance. The current environment is tough for businesses that remain heavily reliant on banks and relatively less on capital markets.

With the CMU, the Commission also wants to clear obstacles that are preventing those who need financing from reaching investors and make the system for channelling those funds – the investment chain – as efficient as possible.

As such the Commission launched a public consultation in February (which closed in mid-May) seeking feedback from the European Parliament and the Council, other EU institutions, national parliaments, businesses, the financial sector and all those interested. Following the closure of the consultation and internal assessment the EU Parliament issued a press release on 16 June on its position on the CMU.

The Green Paper on CMU is complemented by the revision of the Prospectus Directive and a proposal for a new framework on high-quality securitisation.

The key principles that should underpin a CMU are:

  • it should maximise the benefits of capital markets for the economy, growth and jobs;
  • it should create a single market for capital for all 28 MS by removing barriers to cross-border investment within the EU and fostering stronger connections with global capital markets;
  • it should be built on firm foundations of financial stability, with a single rulebook for financial services which is effectively and consistently enforced;
  • it should ensure an effective level of investor protection; and
  • it should help to attract investment from all over the world and increase EU competitiveness.

The Commission is expected to adopt an Action Plan this summer setting out its roadmap and timeline for putting in place the building blocks of a CMU by 2019.


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