CMU and Growth

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CMU and Growth

AFME is providing practical support for the European Commission's Capital Markets Union and Growth agenda.


What are the objectives of the European Commission's Capital Markets Union initiative? And, three years after its launch, is it on track to boost economic growth in Europe?


Capital markets union (CMU) is a flagship initiative of the European Commission. The CMU project is well underway and significant efforts have been undertaken so far to establish the right conditions for developing Europe’s capital markets.

AFME has been a strong supporter of CMU from the early stages and we are committed to supporting the Commission’s initiative. As part of this, we published in November 2014 a position document called “An agenda for capital markets union”.CMU is crucial to increasing and diversifying sources of funding from investors for Europe’s SMEs, corporates, and infrastructure projects contributing to job creation and economic growth. To help raise awareness and provide solutions on those critical issues for Europe, AFME has published a series of reports (see list below).

In September 2015, the Commission published an action plan on CMU which outlines a package of complementary measures designed to expand funding options for businesses; improve incentives for large and small investors; integrate Europe's capital markets; and tackle structural barriers in diverging tax systems, insolvency regimes and securities laws. In June 2017, the Commission published its Communication on the Mid-Term Review identifying the key CMU priorities for the second half of the Juncker Commission’s term. In March 2018, the Commission also launched its Sustainable Finance Action Plan and Fintech Action Plan in the context of the CMU.

As outlined in the response to the Mid-Term Review consultationAFME agrees with many of the priority areas identified by the Commission. AFME in particular welcomes the following priority actions from the Commission’s Mid-Term Review:

  • Review of the European Supervisory Authorities in particular, to strengthen ESMA's powers and increase the effectiveness of supervision for specific functions where warranted in view of the need to support a functioning CMU;
  • A renewed focus on key growth areas, such as improving access to risk capital for small businesses throughout Europe, as well as infrastructure investment, including through adequate capital treatment of qualified corporate-form infrastructure investments by insurers;
  • Stronger focus on fintechwith the need for an EU licencing and passporting framework for fintech activities being assessed later this year;
  • Sustainable finance, with a strong push to develop a European policy programme on sustainable finance and the transition to a low-carbon economy. AFME has greatly contributed to the European sustainable finance debate;
  • A push to improve the EU’s secondary markets for distressed debt, where the European Commission consulted on the development of secondary markets for non-performing loans; 
  • Developing local ecosystems in the EU, particularly in Central Eastern Europe.

Key publications

  • AFME responds to the Commission’s amendments to the delegated act supplementing MiFID II on suitability requirements in the context of its CMU Action Plan on Sustainable Finance (June 2018).
  • AFME comments on the Commission’s High-Level Expert Group (HLEG) final report on sustainable finance (January 2018).
  • The Importance of International Considerations in Pan-European Capital Markets Regulation (April 2018): the note sets out the importance for policymakers to develop policy measures that balance market resiliency, market integrity and market supervision that ensure the level playing field with keeping Europe’s capital markets sufficiently open and competitive to grow their capacity, boost the stimulation of investment, reduce reliance on banks, and create jobs.  The note provides five examples of current cross-border regulatory impediments in pan-European capital markets.
  • The links between the Risk Reduction package and the development of Europe’s capital markets (December 2017): the report sets out eight case studies which explore the potential impact of the RRM on capital markets products and transactions used by different real economy actors such as corporates, institutional investors and EU governments.
  • Global and European Green Finance Policy Directory (December 2017): authored by the GGFC, a group comprised of global and regional financial industry organisations, the Directory aims at providing policymakers and global and regional market participants with a simple reference guide to the major initiatives on green finance, sustainability and climate change being implemented by international and regional bodies and industry organisations.
  • Shortage of Risk Capital (March 2017): This report was authored by AFME with the support of 12 other European organisations representing various stakeholders involved in risk capital. The purpose of the report is to outline the existing sources of risk capital for growing businesses, why shortages occur, and to highlight recommendations for European and national policymakers to improve its supply.
  • Bridging the growth gap report (June 2015): AFME and The Boston Consulting Group co-wrote a report based on a survey of global investors, collectively holding around €9tn of assets under management. It provides a unique, in-depth analysis of how capital markets in Europe and the US compare, and how these differences may have contributed to the wide disparity in growth rates since the financial crisis.
  • SME finance guide (October 2015):designed to help SMEs across Europe to identify funding opportunities and achieve success with loan applications and bond and equity issuances. The SME finance guide covers seven European Member States and is available in six languages.
  • AFME/ICMA Infrastructure finance guide(June 2015): prepared in partnership with the International Capital Market Association (ICMA), this report helps infrastructure issuers more easily access funding sources – including bank, private placement and public project bond financing – and supports the European Commission and EIB’s Investment Plan for Europe. AFME, in cooperation with the ICMA, is actively engaged with the European Insurance and Occupational Pensions Authority (EIOPA) in its work on the definition and calibration of the infrastructure asset class, including infrastructure corporates. 
  • Unlocking funding for European investment and growth (June 2013): this AFME-Oliver Wyman report identified nearly 50 obstacles to funding for corporates and investors. 

Rick Watson

Managing Director, Head of Capital Markets, Membership and Events

+44 (0)20 3828 2737

Pablo Portugal

Managing Director, Advocacy

+32 (0)2 788 3974