There is some movement in the discussions over Capital Markets Union, as was shown at the 11 April European Union Summit Meeting in Brussels. Ahead of the meeting, bankers stepped up their activities to give some impetus to the CMU project, facilitating cross-border access to capital market financing.

The German Banking Industry Committee (DK) and the Fédération Bancaire Française (FBF) produced a joint position paper for their respective Finance Ministries. „We have joined forces to identify the key priorities for future legislative or regulatory action in relation to the promotion of the Capital Markets Union“, said the letter to Christian Lindner and Bruno Le Maire, dated 14 March.

It was signed by FBF President Nicolas Namias, and the President of the German Savings Banks Association (DSGV), Ulrich Reuter. This year, the DSGV is taking the lead in the umbrella organisation for the German banking industry, the DK.

„In order to make meaningful progress in the coming legislative period, we encourage the European Commission to set out a new agenda aimed at making EU capital markets more efficient and competitive, facilitating the real economy by easing the burden on market participants and improving retail investors' access to investment products and services,“ the letter says.

The national banking associations are focusing on reducing bureaucracy and regulation, tax incentives for capital market financing, and reviving the securitisation market. Previous revisions to securitisation legislation have not resulted in a significant growth in the volume of bank loan transfers via ABS.

„In the next legislative period, the European Commission should initiate a comprehensive review of the regulatory framework for securitisation and in particular for the non-STS market, which accounts for 70% of the securitisation market.“ STS stands for „simple, transparent, standardised“, a classification of securitisations that benefit from favourable capital treatment.

The Franco-German initiative is part of the broader discussion on CMU that has been underway in recent months. Various government heads of the euro area countries have expressed increasing irritation that little progess has been made. Eurogroup head Paschal Donohoe had previously insisted, among other things, on the revitalisation of the EU securitisation market, which is a central aspect of the capital markets union. And out of frustration, Le Maire had suggested that a small group of the willing should press ahead. „I'm sick and tired of positions being stated," he said earlier this year. The time has come for decisions to be taken.

„Three things are crucial to driving forward the Capital Markets Union,“ says DSGV board member Karolin Schriever. These are promoting competitiveness, creating a largely standardised legal framework, and reducing bureaucracy. In addition, a bottom-up approach to the development of capital markets should enable the broad participation of market participants.

Stronger capital markets in Europe are a competitive advantage for companies and promote sustainable growth. As a result, a harmonised legal framework across Europe is not a matter of convenience, but crucial to unlocking the full potential of capital markets.