Dear colleagues, it’s good to be back in ECON.
As a former Member of this House, engaging with the Parliament, and especially ECON, is a priority for me.
I’ve now been in the role of Commissioner for just over a year. And it’s been a busy and productive year.
[Capital Markets Union
Let me start with our most recent proposal for the new Capital Markets Union Package.
You all know the importance of the Capital Markets Union, and I know ECON is a strong supporter of CMU.
We both know that strong and integrated capital markets are essential for sustaining growth over the longer term, and also to help us finance the green and digital transitions.
Last week’s CMU package implements a number of the measures in the 2020 Action Plan.
We have four main elements.
First, the European single access point (ESAP), essentially a one-stop-shop for financial and sustainability-related company and product information, making it easier for investors to find opportunities, and for companies to attract investors.
Second, we have put forward a proposal to make European long-term investment funds (ELTIFs) more appealing for investors, helping companies in need of long-term financing.
Third, we reviewed the Alternative Investment Fund Managers Directive. And here we want to clarify the rules on the outsourcing of certain functions by asset managers, and also harmonise the rules for funds that issue loans to companies.
And finally, in order to create a more competitive, transparent, integrated and fair trading landscape in the MIFIR review, we’re proposing the creation of a consolidated tape for trading data.
These proposals are in line with the Parliament’s own initiative report on CMU, and I thank you for your ongoing support.
Briefly looking ahead to 2022, there is more on the way.
We are working on rules to make listing easier for EU companies – especially SMEs.
We will work on an SME IPO fund. We will also have a feasibility study on a scheme for banks to refer SMEs to other sources of funding if the bank cannot or does not want to lend to them.
There is also the upcoming retail investment strategy and here were talking about empowering, protecting and enhancing individuals’ participation in capital markets. We know there is a lot of money on deposit, we can harness this for the good of the citizen.
And financial literacy will also receive my continued attention so that we have citizens empowered in the financial sector.
If we want a competitive and resilient CMU, then we also need vital financial infrastructures inside the European Union.
After Brexit, the EU is overly reliant on CCPs that are now in a third country.
Last month, I announced the Commission’s proposed way forward for central clearing.
Early next year we will put forward a series of measures to build the capacity of EU-based CCPs. We are looking at ways to improve liquidity in EU CCPs and strengthen EU supervision.
This is vital for financial stability in the medium term.
But short-term financial stability means that we also need to avoid a cliff-edge for EU market participants, so I will propose an extension of the equivalence decision for UK CCPs early in 2022.
Let me look then at Banking Union which is the other side of the story.
Together, they can create a stronger European financial system with greater stability and more capacity to absorb economic shocks and to finance the economy.
The completion of Banking Union would underpin a resilient banking sector, a sector that’s undergoing significant transformation due to digitalisation and new market participants. And this has been accelerated during the Covid-19 pandemic.
And Banking Union could increase citizens’ trust in the system. Which was impacted negatively after the last financial crisis.
But we are not making the progress we should make on Banking Union.
As I said in my remarks at the plenary debate on the 2020 Banking Union report in October:
We need to return to fundamentals, and explain to citizens why Banking Union matters. That might help us unlock the blockages.
I think the European Parliament and this Committee has a key role to play in bringing the discussion to citizens and businesses. Perhaps we are all guilty of keeping this technical and high-level rather than for citizens.
The Commission remains fully committed to completing the Banking Union.
Staying with banking, in October we announced a new Banking Package.
It finalises the implementation of the Basel III agreement here in the EU.
The proposal is faithful to the Basel III standards as agreed.
But it also ensures that those standards are tailored where appropriate to the EU economy and our EU banking sector.
As such, implementation will not translate into significantly higher capital requirements overall. This was a political direction given to us.
The EU banking sector’s ability to support the economic recovery should not be constrained by the new requirements.
The Banking Package also introduces requirements for banks to systematically manage ESG risks as part of their risk management and for banking supervisors to assess those risks as part of the regular supervisory reviews.
And it provides stronger tools for supervisors overseeing EU banks, prompted in part by the lessons learned in the Wirecard scandal.
This year, we also took steps to make sure the insurance industry remains strong, and supports our ambitions for the Capital Markets Union and the European Green Deal.
The Commission adopted two legislative proposals in September – one to amend the current Solvency 2 framework and another for a harmonised framework on the recovery and resolution of insurers and reinsurers.
Our prudential rules work well overall, but the goal is to make sure they remain fit for purpose and enable insurance companies to invest with a long-term view.
I look forward to Parliament starting work on our proposals.
Here we have a lot of work to do together. We want to make sure that the money flowing through our financial system is clean.
The Commission’s package on Anti-Money Laundering aims to strengthen protection for EU citizens and the financial system against risks and dangers money laundering and terrorist financing.
At the core of this proposal is a new single rulebook, alongside a new EU authority to fight money laundering –AMLA for short.
AMLA will supervise certain financial sector entities directly. It will coordinate national supervisory authorities and help them in enhancing enforcement of the single rulebook. And it will provide a coordination and support mechanism for Financial Intelligence Units. Because we know those units don’t coordinate sufficiently and we don’t get the added value.
Our goal is for AMLA to be set up by 2023, and operational from 2024. For this to happen, trilogues need to wrap up by the end of 2022.
So I count on Parliament and Council to progress swiftly with this proposal given its importance.
On digital finance, I warmly welcome last week’s political agreement on the Commission’s proposal for a pilot regime for DLT market infrastructures.
This will put Europe at the forefront of innovation. I thank the chair and particularly the rapporteur and the shadows for the speed and effectiveness of their work.
On digital operational resilience (DORA), I welcome your vote this morning, adopting the Committee’s report and your agreement to enter into negotiations with the Council.
This is a big step forward, and I thank the rapporteur and shadows for their work.
On the Markets in Crypto-Assets Regulation, the Council last week adopted a general approach.
It is now up to the Parliament to adopt its report so we can sit down and move the legislative process forwards.
Crypto markets are growing very rapidly and they pose particular risks to consumers, market integrity and indeed potentially for financial stability. MiCA proposal is designed to address these risks.
We have no time to lose: timeliness is of the essence. The markets are moving every day, and regulators around the world are taking measures. So it is really important that Europe has a framework in place as soon as possible to protect the integrity of our markets.
I welcome the engagement of the rapporteur and shadows and urge them to continue their efforts to reach a swift agreement. Happy to see that progress.
It has been a busy year, and I want to thank ECON for your hard work, cooperation and support.