Towards variable union in Europe's capital markets
On November 23rd, ECMI brought together an excellent line-up of leading academics, policymakers and industry representatives at its 7th Annual Conference to present their expertise on long-term investment, supervisory architecture, derivatives markets and fintech. The key message was that capital markets union must go beyond the actions set for end-2019. CMU is certainly a long-term project that will require the support of multiple stakeholders from both the public and private sectors. Capital markets, in particular equity, and long-term institutional investors, are best suited to finance real assets in the economy. There are certainly areas that should be brought within the remit of the European Securities and Markets Authority, but achieving supervisory convergence will be the main objective where this is not yet possible or necessary. The review of the European Market Infrastructure Regulation (EMIR) introduces a new two-tier system for third-country CCPs, and those deemed systemically important (Tier 2) will be subject to stricter requirements. Brexit-driven relocation might lead to a more balanced landscape of the euro-denominated clearing activities in Europe. With respect to the potential of distributed ledger technology (DLT), it is essential to establish a critical mass of market players and interoperability with the existing infrastructures.
Presentations/speeches/photos are available here. A post-conference report will be published in January 2018.