EU’s Demands On Capital Market
EU officials insist on forming a stronger, more mutual and cheaper capital market by 2019. The so-called CMU (capital markets union) is planned to be created before the Brexit process is over. The CMU suggests lowering company funding’s dependence on bank loans and because many of them use London banks, the executive European Commission claims the regulations should be finished during the divorce process.
The latest offer from the Commission lays out unified rules for the covered bond market, a EUR 2.1T sector, as well as reduced red tape, imposed by national watchdogs on mutual and alternative investment funds from other EU states.
Valdis Dombrovskis (European Commission Vice President) said: "To have a genuine capital markets union in Europe by 2019, we need to advance in three directions: European labels and passports for financial products, harmonized and simplified rules to deepen capital markets, and more consistent and efficient supervision".
Brussels stated that the offer must save some EUR 440M each year in costs for existing cross-border distribution. The final announcement is yet to be made by the EU states and the European Parliament.