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European Commission launches Capital Markets Union action plan

Xinhua, October 1, 2015 Adjust font size:

The European Commission launched the Capital Markets Union (CMU) action plan here Wednesday to help build a true single market for capital across the 28 European Union member states.

As part of the Commission's priority to boost jobs, growth and investment across the EU, the CMU, a key pillar of the Juncker Investment Plan, aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe's businesses and long-term projects.

The Commission also wants to break down barriers that are blocking cross-border investments in the EU to make it easier for companies and infrastructure projects to get the finance they need, regardless of where they are located.

The action plan was built around some key principles, including creating more opportunities for investors, connecting financing to the real economy, fostering a stronger and more resilient financial system, and deepening financial integration and increasing competition.

The key early actions included new rules on securitization, which is the process where a financial instrument is created, typically by a lender such as a bank, by pooling assets for investors to purchase. The Commission was proposing a regulatory framework for securitization which is "simple, transparent and standardized" and subject to adequate supervisory control.

Moreover, as part of a package of measures forming part of the CMU initiative to remove barriers to investment in the EU, the Commission made a number of amendments to the Solvency II Delegated Regulation, which is an EU legislative program to be fully applied in all 28 member states from early 2016 and introduces a new, harmonized EU-wide insurance regulatory regime.

"I want the CMU to help European businesses, and our SMEs in particular, have a wider range of funding sources. I want it to give SMEs more options for investing their money. I want to knock down barriers to make it easier for capital to flow freely across all 28 member states," said Jonathan Hill, European Commissioner responsible for Financial Stability, Financial Services and Capital Markets Union. Endit