A Capital Markets Union for the EU

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What part do private investors have in the EU’s plans for a ‘capital markets union’ (CMU)? They may have to fight to be heard, because they are thought to be too risk averse and short-term oriented.

Three representatives of the UK Shareholders’ Association (UKSA) attended a conference in Brussels on 6th May to hear a series of eminent speakers, including the new financial commissioner, Lord Hill, discuss what CMU is likely to involve.

The European Commission has stated that EU households are the main source of long-term financing for the real economy. That is where the money comes from, but what guarantees will they have that their savings are being properly looked after and invested? As things stand individual European citizens run the risk of being sidelined and dismissed by the future architects of the CMU, but this must not happen, says Guillaume Prache, managing director of Better Finance, an organisation representing investor bodies across Europe to which UKSA is the principal UK affiliate.

Guillaume Prache asserts, “For CMU to succeed, European citizens, as individual investors and savers, should be at the heart of the project. With 62% of financial savings invested in long-term investment products and (more) in small and mid-caps than large caps, (they) prove themselves to be less risk-averse and more long-term oriented than institutional investors are”.

Return Capital Markets to Their Natural Participants A Better Finance Press Release May 2015

An EU Capital Market Union for Growth, Jobs and Citizens A Better Finance Briefing Paper May 2015