European Commission plans reform to get fintech to perform
As befits the EC, it is all very vague and devoid of stats or timelines
The European Commission (EC) is proposing reforms to pave the way for further financial integration and a full capital markets union – with a handy boost to fintech included.
President Jean-Claude Juncker, in his State of the Union Address, underlined the importance of the capital markets union and the EC’s plan to “promote jobs, growth and investments in Europe and to strengthen the Economic and Monetary Union (EMU)”.
When the EU overhauled its financial system in the wake of the financial crisis, it introduced a “Single Rulebook” for financial regulation in Europe and created the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). However, the EC now says “more needs to be done to enhance regulatory and supervisory convergence within the Single Market”.
Valdis Dombrovskis, VP for financial stability, financial services and capital markets union, adds: “The EU needs to act as one player so that we can stay ahead of the curve. More integrated financial supervision will make the EMU more resilient.”
As befits the EC, it is all very vague and devoid of stats or timelines. However, key features of the proposal include:
- The European Insurance and Occupational Pensions Authority (EIOPA) “will have a stronger role in promoting convergence in the validation of the internal models that some large insurance companies use to calculate requirements on solvency capital”;
- The European Securities and Markets Authority (ESMA) will authorise and supervise the EU’s “critical benchmarks and endorse non-EU benchmarks for use in the EU”;
- The European Supervisory Authorities (ESAs) will “prioritise fintech and will co-ordinate national initiatives to promote innovation and strengthen cybersecurity”.
The EC has been chatty about fintech before. Back in March, it unveiled its action plan for consumers and asked for feedback on its fintech ambitions. At that time, the EC wanted to prise open national barriers as only 7% of consumers currently buy financial services from another EU member state.
