Panel: Conceptualizing the EU Capital Markets Union
Huw Pill, chief European economist within the Global Investment Research Division at Goldman Sachs, moderated a panel discussion in London exploring the possible creation of an EU Capital Markets Union.
Panelists Jim Esposito, co-head of the Global Financing Group at Goldman Sachs; Philippe Ithurbide, global head of Research, Strategy and Analysis at Amundi; and William Wright, founder and managing director at New Financial, shared their perspectives on the benefits of creating – as well as the steps necessary to deliver – a well-functioning capital markets union in Europe.
Wright, on defining an EU Capital Markets Union: “There’s been a lot of progress over the past 20 years in terms of harmonizing capital markets across Europe, but we’re still a very long way away from anything that you would call a single capital market. I see a capital markets union firstly to streamline access to capital markets; secondly to remove unnecessary artificial barriers to investment within capital markets; and thirdly to recalibrate and readjust the regulatory environment in Europe for capital markets.”
Esposito, on the importance of small and medium-sized enterprises (SMEs): “SMEs are the lifeblood of the European economy. These family-owned and privately-owned businesses are critical to getting Europe growing again. A robust discussion is taking place about moving from a bank-dominated funding model to a capital markets-funding model, and guess what? SMEs don’t naturally fund in the public capital markets. Getting Europe growing again hinges on SMEs. If you’re concerned about banks deleveraging further, how SMEs fund themselves going forward is a major question for debate.”
Ithurbide, on the role of long-term investors: “We need long-term investors, because when they invest, they are supposed to stay. In Europe we have too few. We have a huge excess of savings, but we have a debit of long-term investors.”
This session followed an event on the same topic co-hosted by Goldman Sachs and the London School of Economics and Political Science in February, Dialogue on Creating an EU Capital Markets Union.