15 Dec 2022

2022 ECMI Annual Conference

Apostolos Thomadakis / Karel Lannoo / Jelmer Nagtegaal

0
Download Publication

2269 Downloads

The ECMI Annual Conference 2022 gathered policymakers, industry participants an academics for a full-day discussion on the future of capital markets. It included a keynote speech on developing viable venture capital (VC) and private equity (PE) markets, as well as sessions on making Capital Markets Union (CMU) a reality, empowering retail investors, and finding a balance in sustainability reporting. The 2022 ECMI best paper on “Information intermediaries and sustainability: ESG ratings and benchmarks in the European Union” was also presented.

–  The European VC and PE market has developed a lot over the past few years and plays a fundamental role in the European economy. However, the regulatory framework should become more supportive: the regulatory treatment of PE and VC should be reconsidered, including under banking and insurance rules, while its attractiveness to retail investors should be enhanced.

–  The CMU initiative remains essential for recovery, growth and resilience across the EU but progress has proven difficult and slow. Although more commitment and more ambition is needed from the Council of the EU, this is currently lacking as Member States do not seem to fully grasp the benefits of capital markets and market financing.

–  Empowering retail investors is key to higher retail investment participation rates. Through higher trust in financial services, more readily available advice and a regulatory ecosystem that both protects as well as informs investors, retail investment can be stimulated.

–  Having in place common reporting standards that provide much-needed transparency and standardisation on a global scale is very important. But, it is equally important to ensure that compliance does not overshadow the most decision-useful information, divert resources away from sustainability performance improvement or increase the cost of compliance, complexity and paperwork in a way that hinders its benefits.

–  As sustainable finance has been steadily expanding over the past few years, so has the development and use of sustainability ratings, benchmarks and indices. However, more emphasis should be put on the disclosure duties on methodologies and conflict of interests of ESG ratings services. In addition, the legal framework for financial analysts might be more suitable when it comes to ESG ratings, compared to that for credit rating agencies.

This report summarises the discussions held during the annual conference.