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Eight EU Finance ministers come together to present common position on Capital Markets Union (CMU) priorities and matters of common interest Back
18th July 2018: The finance ministers of Ireland and its new partners in an alliance that includes Nordic and Baltic states and the Netherlands have called for resources to be focused 'on those outstanding parts of the CMU Action Plan with the largest impact, which enjoy broad support among Member States and can be completed quickly.' A statement posted on the Irish Department of Finance website today outlines their view on CMU. CMU will be major theme at the upcoming Financial Centres Summit, Dublin 2018 which takes place in Dublin Castle on 2nd & 3rd October.
As reported by Finance Dublin last May, Ireland has engaged with seven other EU member states to form the new 'association,' which is intended to establish shared positions on matters of common interest, such as CMU. Today's statement by the finance ministers of Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Sweden and The Netherlands is the first public assertion of shared views to be published by this new alliance.

In it the ministers caution: 'Taking account of the European Union political and institutional cycle, time is not on our side.' They propose, therefore, action in a number of key areas, including progressing the Investment Firms Review, proposals to allow Europe's financial services industry benefit fully from technological innovation and a strengthening of the three European Supervisory Authorities. Their aim is to ensure that CMU is advanced as much as possible by early 2019.

The collective statement by the eight finance ministers says the Investment Firms Review will implement a more proportionate regulatory regime for investment firms while the proposed framework for covered bonds would enhance their use as a stable and cost-effective source of funding for credit institutions to help finance the real economy.

'In addition proposals that help provide financing to European companies that actively contribute to a low carbon and environmentally resilient economy and sustainable development must also be advanced. In that regard, accessible and comparable information about sustainability aspects for investors is crucial. We also have to make sure that the financial industry becomes aware of the risks related to climate change and the necessary transition to a sustainable economy.'

The ministers call for a focus on 'those proposals that will allow the financial services industry in Europe to benefit fully from technological developments and innovations that improve financial services and enhance their integrity.

'Financial technologies solutions using, for example, digital identification, mobile applications, cloud computing and cyber security principles change the financial industry and at the same time create the opportunities to provide better access to finance and address financial inclusion, support operational efficiency and enhance the competitiveness of the economy.'

Thirdly, the ministers highlight the role that an effective supervisory framework can play in providing the foundation for integrated European capital markets, by ensuring a consistent approach to the implementation of the Single Rule Book across Member States, and in providing an environment which attracts international capital and expertise into the EU.

'The Review of the European System of Financial Supervision is an important opportunity to enhance the current framework and build upon the existing strengths of the three European Supervisory Authorities (ESAs). The focus of the ESA review must be to ensure that there is a level playing field in the Union on the provision of financial services in order to ensure supervisory convergence between Member States.

'We should ensure that the expertise and knowledge of national competent authorities continues to be shared with the ESAs. The voice of the national competent authorities is a central part of the ESA framework, which are member organisations.'

The ministers conclude that this outcome essentially depends on strengthening the existing tools. 'We remain convinced that amendments can be agreed by the Council within the timeline of this Commission and Parliament, but progress on CMU should not depend on the ESA Review,' they say.

As well as emphasising the role of national competent authorities within the work of the ESAs, the group of eight finance ministers are adamant that national reforms can play an important role in achieving the aims of the CMU.

'The pursuit of national reforms will result in the further development of local capital markets, helping to diversify financing options for the real economy and improve financial stability via diversified funding sources. The Commission’s Structural Reform Support Service has assisted Member States in introducing reforms to develop their capital markets and we believe it has an important role in helping further develop our capital markets,' they say.

Their joint statement concludes: 'Notwithstanding the complexities of the many CMU Action Points, we are committed to working constructively within Council and with the Parliament and the Commission in order to help ensure the priority issues are delivered within the current term. We reiterate that this will require a prioritisation of the existing open legislative files in order to ensure that CMU is advanced as much as possible by early 2019.'
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