Free translation of French article on Finance and Regulation
Following Bruegel, it was BETTER FINANCE’s turn to bring European policymakers and stakeholders together in Brussels to discuss the CMU project. BETTER FINANCE is an NGO funded by the European institutions, fighting for a financial system at the service of individuals and the real economy. Up for discussion was the Green Paper on the CMU with participants putting forth their ideas, worries and reservations. The related EC consultation on the Green Paper was closed on May 13.
Some of the key messages from the BETTER FINANCE conference:
Guillaume Prache, BETTER FINANCE:
- "Households account for 62% of Long Term Investment in Europe, of which 90% are fully owned."
- "Households are not more risk averse than institutional investors. They are merely against High Risk investments with Low Returns!”
Institutional Roundtable
Jacques de Larosière (Eurofi)
- "There should be more investment in stocks (equity)."
- "The leverage of banks has declined. Who will assume the risks?"
- "Should we rather encourage direct or intermediated holding? And when should we favour the one or the other?”
David Wright (IOSCO)
- “The CMU will not be successful for midmarket companies without an complementary technological leap, and it is midmarket companies that create jobs."
- "The CMU is a great project for Europe."
- “For those who miss-sell products deliberately, it should be jail. Jail!”
Olivier Guersent (European Commission, DG FISMA)
- "Our mission during Lord Hill’s term in office: "Manage risk and promote growth".
- “All midmarket companies are not alike, some deserve intermediated financing, others don't.”
Political Roundtable
Sven Giegold (ECON, Greens)
- "Harmonizing rules in Europe rather than standardizing them. Continue promoting regional initiatives."
- "It is time to separate the useful expenses from the unnecessary ones in financial intermediation."
Markus Ferber (ECON EPP)
- "We forgot one thing: Financial Services exist to provide services and Banks are made to take risks…"
Philippe de Backer (ECON, ALDE)
- "There is an urgent need for a pan-European pension savings product."
In our view these short sentences are rather telling. They do not favor intermediation; they were spoken at an event organised by an NGO that defends the interests of individual investors. It will be interesting to see how these little soundbites will be incorporated in the upcoming private and public interventions in Brussels.