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Priorities of the incoming Commission in the financial sector

Day 2 Afternoon

Thursday 04 April

Room :

Constanta Room - Roundtable

Speakers

Chair
David Wright - President, EUROFI
Public Authorities
Roberto Gualtieri - MEP & Chair, ECON Committee and Member of the Brexit Steering Group, European Parliament
Jörg Kukies - State Secretary, Federal Ministry of Finance, Germany
Odile Renaud-Basso - Director General of Treasury, Ministry of Economy and Finance, France
Hans Vijlbrief - President of the Eurogroup Working Group and the EFC, Council of the European Union
Harald Waiglein - Director General for Economic Policy and Financial Markets, Federal Ministry of Finance, Austria and Member of the Board of Directors, ESM & EFC
Industry Representatives
Vittorio Grilli - Chairman of the Corporate and Investment Bank EMEA, J.P. Morgan
Leonique van Houwelingen - Chief Executive Officer, BNY Mellon’s European Bank
Jean Lemierre - Chairman, BNP Paribas

Objectives of the session

To meet Europe’s investment needs over the coming decade, something must change. Europe’s investment gap is estimated at about € 700 bn per year of which € 180 bn per year is the climate gap. Europe needs more sources of private sector financing going into the economy, longer term investments notably to accommodate the ageing population, as well as a greater availability of risk capital to finance innovation and sustainable growth.

Maintaining the status quo is no longer an option. A radical change is needed. Cross- border financing has decreased since the financial crisis. Fragmentation in the single banking market has indeed increased despite the implementation of the Banking Union five years ago and the Capital Markets Union is far from having kept its promises. The euro area exhibits a savings surplus of more than €300 billion, or 3,5% of GDP in 2017, which is no longer being lent to the other euro-area countries but to the rest of the world. Despite the strengths of the EU (single market, abundant savings, level of education…), the prudential framework for long term investment is penalizing and projects sponsors are not prone to launch new investment projects.

And making progress on the EU financial integration agenda is becoming increasing difficult since the political and social context increasingly turn towards domestic agendas. In addition, considering the very high level of public and private indebtedness in certain significant countries of the EU, the room for manoeuvre in terms of monetary and fiscal policies is narrower today than 10 years ago.

However, If the EU wants to be sovereign and prosperous, it has become urgent to restore capital mobility within the European Union, favour long term investment and support innovative and growing projects with a strong immaterial content in all parts of the Europe Union. At the same time improving the efficiency of the EU financial players is essential to provide financing conditions in terms of quality and costs at a time when technological innovation requires significant investment.

The objective of this session is to discuss the priorities in the financial sector for the upcoming Commission. Speakers will be invited to express their views on the priorities to effectively enhance private risk sharing and improve capital allocation throughout the Union, encourage the financial industry to better finance growth and leverage digitalisation and artificial intelligence and be up to sustainable finance needs.

Points of discussion

What are the European priorities for the financial industry to better finance growth?

Banking Union and Capital Markets Union: how to explain the limited progress achieved since many years in the integration of financial markets and what are the priorities for the upcoming Commission?