Savings and Investment Union key to unlocking Europe's growth
De Nederlandsche Bank (DNB) Executive Director Olaf Sleijpen advocated for a robust Savings and Investment Union to boost Europe's competitiveness. He urged EU member states to remove existing barriers hindering cross-border investment.
Fragmented markets stifle European innovation
De Nederlandsche Bank (DNB) Executive Director Olaf Sleijpen highlighted the urgent need for money to flow more easily from European savings into productive investments, likening current capital markets to a 'stuck vending machine'.
Despite the critical role of deep, liquid, and integrated capital markets for Europe's competitiveness, they remain fragmented by numerous barriers.
These include 27 different insolvency regimes and national requirements for cross-border investment and supervision.
This fragmentation hinders cross-border investment, causing Europe to miss out on crucial risk capital for businesses, especially scale-ups, and ultimately stifling innovation and economic growth.
Sleijpen noted that European households hold over 10 trillion euros in low-yield bank deposits.
Concurrently, since 2008, over 30 percent of European 'unicorns' – privately held startups valued over 1 billion dollars – have moved to the US, partly due to a lack of adequate risk capital.
Unlocking private capital through reform
Sleijpen strongly supports the European Commission's strategy on the Savings and Investment Union, welcoming initiatives to channel household savings into capital markets, such as proposals on pension reform and citizens' savings accounts.
He highlighted the 'coalition of the willing' through the Finance Europe initiative, which demonstrates progress in boosting retail investments and reducing cross-border barriers.
DNB also backs the Commission's recent Market Integration Package, including proposals for harmonizing supervision under ESMA.
Sleijpen stressed that integrated European capital markets require stronger European-level supervision, viewing centralized oversight of significant cross-border market participants as a logical step.
Member states hold the key
An integrated European capital market critically depends on Member States actively removing remaining barriers, especially in taxation and insolvency law.
Further progress on the Banking Union, including simplifying the rule book, is also essential for comprehensive financial integration.
This concerted effort is vital to ensure capital flows freely, fostering prosperity and stability across Europe.