Hamburg, 8 June 2015 – Today the European Commission meets in Brussels to discuss steps to a capital markets union. Their focus on reviving securitisation shows that they have still not learnt the lessons of the financial crisis, says the World Future Council.
According to EU financial markets commissioner Lord Hill, the capital markets union will ease money flow to business, thus creating growth and jobs. Suleika Reiners, financial expert at the World Future Council: “The capital markets union will primarily increase proprietary trading, resulting in new risks to financial stability instead of providing benefits to the real economy. The securitisation business played a crucial role in the last financial crisis and causes financial bubbles. Imposing quality standards for securitisation instruments will not be enough to tackle the risks of excessive trading.”
Canada has already banned the repledging of securities as collateral. The EU should follow this excellent policy example, argues the World Future Council. Re-securitisation should also be prohibited.
„The capital markets union wants to solve non-existing problems. The lack of access to capital markets is not the problem, but rather low demand from business for either credit or capital due to the currently weak economic conditions in the EU“, says Reiners.
Click here to read the World Future Council’s full response to the European Commission’s green paper “Building a Capital Markets Union”.
World Future Council
Media and Communications Manager
+49 4030 70 914-19 (Hamburg, Germany)