The Euromoney Capital Markets Union Forum

Presentations from the Forum: (click to download)

Keynote Address: Lord Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union, European Commission

RBS: QE Infinity and the Neverending Crisis

RBS: Macro Credit Outlook

RBS: EU-UK Clash

Capital Markets Union attempts to fundamentally change the relationship between the banking sector and the capital markets. There are many – sometimes conflicting – opinions on what that relationship should be. Over 100 delegates gathered on 3 December at the Euromoney Capital Markets Union Forum in Brussels, to discuss what CMU means for them.

In our agenda, we covered the issues most pertinent to the European Commission’s CMU proposals, including: regulatory capital relief for simple, transparent and standardised securitisation, and investment in infrastructure; pensions; and consultations launched on a pan-European covered bond framework; venture capital funds; and the cumulative impact of post-crisis reforms.

The conference opened with a clear message from Lord Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union; CMU will make the European financial system stronger. The Action Plan is broad and ambitious in scope, he said, but he remains undaunted by the scale of the challenge. Lord Hill touched on various upcoming initiatives such as a stronger European passport system for investment funds, overhaul of the Prospectus Directive, green papers to be launched on retail financial services and crowd funding before the end of the year, and changes to insolvency and tax laws.

Jean Lemierre, director and chairman of the board of directors of BNP Paribas highlighted that CMU proposals need to be implemented at a faster pace to match the speed of banking sector reforms. When asked, he did not think that CMU would fundamentally affect banks’ business models, at least in terms of lending.

In his keynote speech, Alberto Gallo, head of macro credit research at RBS stressed that the biggest risk to volatility in the financial system in 2016 will be political, with Brexit, French and German elections coming up next year. QE will not work, he noted, if we do not reduce this volatility. Ross Walker’s afternoon keynote address looked specifically at Brexit. Polling data, he said, is currently too close to call. However, a large show of hands in the audience thought the UK is likely to stay in the EU, with the majority of delegates agreeing that the EU would be worse off without the UK.

Speakers on the opening panel looked at what CMU is trying to achieve and why. Each speaker highlighted what they thought to be the most important proposed measures and given the length of the task, how they thought CMU can really contribute to a solution for current economic problems.

ABS panellists discussed the problem of fragmentation of regulation. One of the challenges for asset managers, they said, is that now that investors can rely on them to do due diligence, they are not quite sure how to tell their clients they have done so. Private placement speakers argued that there is a case for action for a Pan European private placement market given that it targets different issuers.

The SME and mid-cap corporates panel touched on the newly revised Prospectus Directive and key priorities for companies in the coming months. In addition, speakers highlighted the small percentage of companies that are currently able to access the equity markets for financing and how it was unlikely that the equity-debt financing ratio would change dramatically as a consequence of the implementation of the CMU action plan.

Regarding covered bonds, speakers discussed whether the European Commission's consultation paper was needed, given the performance of the covered bond market through the crisis, and what the possible outcomes of this consultation are likely to be. In addition they discussed the industry led ‘covered bond label' initiative, the progress that it has made and the reasons that the take up, whilst high, is still less than 100%. They went on to discuss whether the covered bond as a funding tool could address other European funding needs such as for small and medium sized enterprises.

In a session on pensions, speakers discussed both how to increase the take up of occupational and private pension schemes and the behaviour of pension managers as an investor group. Discussing take up, it was noted how cultural differences and national specificities were important but how take up could be improved by increasing financial literacy levels, fiscal incentives and existing private sector solutions. As an investor group, the panel considered the potential impact of asset and liability practices and liquidity rules on the optimal allocation of investments.

Looking at infrastructure finance, speakers noted that even if fiscal conditions in both developed and emerging economies improve, the widening infrastructure financing gap is unlikely to be met from public sector sources alone. Private capital must be mobilised to fill these gaps. Semi private investors such as Caisse de Depots, KfW and CDP will have an important role to play. Municipalities in Europe are not much used to dealing with capital markets investors. Panellists also discussed the EIB programme to provide funding, with EUR 31 billion that can be used for riskier projects in Europe. Lack of projects in Europe is not due to lack of funding, but rather due to a lack of political will to embark on these projects.

The final panel of the day looked at some of the possible impediments to a deeper Capital Markets Union. Cultural and behavioural factors amongst retail investors such as a preference for bank deposits, risk aversion and financial literacy levels were all discussed. In addition the panel itemised some of the practical barriers which exist to the cross border fund management industry and discussed how easy it will be for the forthcoming European Commission green paper to address these. 

Euromoney would like to thank our co-hosts, AFME and ICMA, our lead sponsor RBS, and all speakers for making this Forum such a resounding success. We look forward to seeing you again next year.


For sponsorship enquiries for 2016, please contact John Baskott on or tel +44 20 7779 8823

For speaking enquiries for 2016, please contact Sara Leech on or tel +44 20 7779 8819