UK referendum will not affect push for capital markets union - EU finance chief
By Huw Jones
LONDON (Reuters) - A push towards a capital markets union in the European Union will continue regardless of a planned referendum in Britain on its membership of the 28-country bloc, EU financial services chief Jonathan Hill said on Friday.
London is the bloc's biggest financial centre and regarded as a core part of Hill's efforts for a pan-EU effort to increase the ability of markets to raise finance, to drive economic growth in Europe as banks rein in lending.
"The question of capital markets union and the question of a referendum for Britain I consider to be totally separate issues. The question of capital markets union is something I am trying to build for all 28 member states," Hill told reporters on the sidelines of a conference.
"I hope very much that Britain makes an important contribution to it. What I hear constantly ... is that people in the financial services industry, which is clearly a very strong industry centre here in London, see the importance of being part of a strong single market and the benefit that can come from it," Hill said.
He will set out CMU priority actions in the autumn to put in place the building blocks of union by 2019, well after Britain's referendum which is due to take place by the end of 2017.
The first "quick wins" will be to make it less burdensome for companies to issue debt and bonds, and to encourage a revival in the EU's market for securitisation or the pooling of debt to issue bonds.
The EU's European Insurance and Occupational Pensions Authority (EIOPA) has already tweaked the bloc's insurance rules, known as Solvency II, to encourage insurers to buy securitised debt.
"I think there is more potential here and I have asked EIOPA to look at these issues and to report to me in June to see if we can look at other investment areas of Solvency II, to look at whether we can change some of the calibrations to encourage investment," Hill told the City & Financial conference.
Steven Maijoor, chairman of the EU's European Securities and Markets Authority, said the lack of "equity culture" in many EU states meant that progress on building a CMU would take time.
Many households prefer putting their money in bank savings accounts with guaranteed returns rather than shares, he said.
The appetite for more rules to implement CMU is also very limited and even voluntary changes to longstanding market practices would face resistance in some countries.
"Quick solutions will not be available," Maijoor said.
Hill said he will publish a discussion paper towards the end of the year on giving consumers access to a better choice and "keener prices" in retail financial products.
(Editing by Carolyn Cohn and Pravin Char)
