CMU is dead, long live the CMU
The branding may be on the way out, but there are plenty of reasons to be encouraged about the potential for real progress in the next phase of the Capital Markets Union.
In a paper published this week, a group of high level experts from seven EU member states set down their vision for how capital markets can be improved in the next term of the European Commission.
Readers will have immediately been struck by the proposal to ditch the term Capital Markets Union in favour of Savings and Sustainable Investment Union.
Though this rebranding was clearly put forward as a way of giving the project some more immediate popular appeal, it did not mean the expert group was shying away from long-standing issues in the field of financial market reform.
The authors of the report were much bolder than the European Commission in recommending that the European Securities and Markets Authority takes on a more central role in the supervision of capital markets infrastructure, for example.
There was also an entire chapter in the paper dedicated to “massively” developing equity markets — something that might have been considered unthinkable a decade ago, given the dominance of the banking sector in Europe.
The biggest sign of encouragement was not in the detail of the report, however, but rather in how in came about.
The expert group was set up at the behest of the finance ministers of Germany, France and the Netherlands, and also included representation from Italy, Spain, Poland and Sweden.
Given that political differences between these key member states can often translate into inaction at the EU level, market participants should be heartened to see the countries working together.
If the CMU project is going to be revitalised in the next legislative term, there is little doubt that it will have to come from the ground up.