Rebooting the Capital Markets and Banking Union: Savings and Investment Union

Key messages

• Channel household savings into capital markets by developing EU savings and retail investment products that have few administrative burdens, without undue restrictions on portfolio composition, and that do not require locking in of capital for long periods.
• Increase capital markets financing by supporting the venture capital and private equity industry and encouraging institutional investors such as pension funds and insurance companies to invest in long-term risk capital.
• Put in place a Banking Union which enables liquidity, including bank dividends, to flow freely between Member States.
• Ensure that the implementation of Basel IV supports companies’ need for capital and risk management products whilst safeguarding a level playing field vis-à-vis other major jurisdictions.
• Ensure thata level 2 and level 3 acts published by the European Supervisory Authorities are proportionate. This means that a flexible approach should be adopted in the context of the definition of default.
• Simplify financial rules that require banks and financial institutions to assess ESG risks for all client companies, including smaller ones.

What does BusinessEurope propose?

BusinessEurope urges the EU and the Member States to facilitate both private and public investments at an unprecedented level to regain the EU’s lost competitive edge and to finance the green and digital transitions. Finance needs to be vailable through a variety of channels and on reasonable terms. We need to facilitate the free flow of capital in the EU and to promote cross-border investment. Developing a Savings and Investments Union (SIU), which combines the Capital Markets Union (CMU) and the Banking Union, should help to increase the availability of finance but the main goal should be to make the EU more attractive to both foreign and domestic investors.