Let’s harness the Capital Markets Union’s (CMU) potential to benefit our citizens as financial consumers, retail investors and pension savers, as well as our planet, economy, and future generations. This will ensure Europe’s prosperity and security in a rapidly changing geopolitical environment.
BETTER FINANCE acts as an independent expertise centre and strengthens the voice of European financial consumers, retail investors, shareholders and EU citizens as insurance policyholders and pension savers.1 We use our collective independent financial expertise, to work together with the EU policymakers to deliver a truly Sustainable Capital Markets Union that “works for people”. Major efforts have already been made to achieve this objective. Nevertheless, individual investors’ participation in capital markets remains heterogeneous across the EU. This heterogeneity should prompt the national governments to urgently look for the best practices and learn from solutions that have proved the most successful at national level in driving retail participation.
We must strive for more ambitious targets in terms of financial wealth for EU citizens The financial well-being of EU citizens and the competitiveness of the EU economy are threatened by too low participation in local capital markets. Since 2008, the significance and relative size of EU capital markets have greatly diminished, particularly in comparison to the United States. While non-financial issues like the physical health conditions, the war in Ukraine, or the control of immigration into the EU do impact the welfare of EU citizens, the securing of the financing of the EU economy plays an important role in this widening gap in financial well-being.
Growing pressures on national pension systems and the risk of pension inadequacy, which stems, in particular, from complex and underperforming pension savings products, severely threaten the well-being of European citizens.2 EU capital markets can be more competitive only if they are deeper, more integrated, and stronger, with citizens at the centre. More competition among service providers, promotion of market efficiency, integration and especially better outcomes for investors are needed at the forefront of the debate.
To make EU capital markets more competitive and attractive for citizens and enterprises, a CMU that
works for people, BETTER FINANCE recommends prioritising two measures at the national level:
- Provide access to independent investment advice
- Facilitate access to simple, cost-effective, and pan-European investment products