EU FlagThe European Commission is launching an action plan to build a Capital Markets Union for the EU’s 28 Member States by 2019. The overall aim of the Capital Markets Union is to link savings with growth and give companies greater choice about where and how they get their financing. European businesses remain heavily reliant on banks, which makes the economy vulnerable to a tightening of bank lending. Making it easier for companies to get funding from markets, while not replacing banks as a source of financing, should make Europe more attractive to inward investment and spread risk more effectively than in the past.

The European Commission is today launching an action plan to build a Capital Markets Union for the EU’s 28 Member States by 2019. The overall aim of the Capital Markets Union is to link savings with growth and give companies greater choice about where and how they get their financing. European businesses remain heavily reliant on banks, which makes the economy vulnerable to a tightening of bank lending. Making it easier for companies to get funding from markets, while not replacing banks as a source of financing, should make Europe more attractive to inward investment and spread risk more effectively than in the past.

In addition to the action plan, the Commission is also putting forward two proposals for legislation – on simple transparent and standardised securitisation and on treatment of infrastructure and European Long Term Investment Funds as assets classes. It is also launching two consultations and a call for evidence – on venture capital and social entrepreneurship funds, on covered bonds, and on the cumulative impact of financial legislation respectively.

The action plan sets out the actions that will be taken over the coming years. In addition to the more immediate steps it is proposing – notably on securitisation and on infrastructure project financing – the Commission also plans to launch a comprehensive package of measures to support venture capital and equity financing in the EU between 2016 and the end of 2017. And looking further ahead, by 2019, the Commission aims to make targeted changes to address some of the most difficult, long-standing barriers to a better allocation of capital across Europe.   To read the full story click on the link below.

Source:  EU Commission

Note to BIIA members:  BIIA has submited to the EU Commission its comments on the Capital Markets Action Plan:  https://2018.biia.com/member-alert-european-union-commission-capital-markets-union-action-plan
The program is geared to provide access to finance to the larger end of the SME segment and will raise the demand for SME rating services.