Danuta Huebner , photo:
over the creation of the union capital markets work the British Conservative EU Commissioner. Financial stability Jonathan Hill. This year is expected to be the first concrete proposals in this case, classified as priorities for the European Commission.
Having a past relationship with the City of London Hill is aware that European companies need better access to financial resources than we do now. Banks do not want to continue to lend funds to companies because they deem insufficiently reliable. This means that companies can not grow and the economy suffers.
– We need to develop other (non-bank – PAP) sources of funding for the European business. I reduce the cost of capital – the Commissioner called on one of the first speeches after taking office.
You need a boost to
Raised to be struggling with a crisis, the EU, and especially stagnant euro zone needs a new impetus to economic growth. Union Capital Markets to assist in the strengthening.
“All the problems that plagued for months Europe (…) meant that there was a need to look at how you can increase the role of capital markets in financing investment,” – said the PAP was a European Commissioner. Regional Policy Commissioner Danuta Huebner.
Distance Europe-USA is a large
Europe is far behind the United States in terms of financing the economy through capital markets. Medium-sized companies in the US enjoy the benefits of capital markets, five times more than the same company on the Old Continent. European business caters to 80 percent. their financial needs in banks, and only 20 percent. through debt securities.
This is the main reason why the European Commission wants to unlock opportunities for capital in Europe, which in large part is simply frozen. By fragmentation of European capital markets, shareholders and debt buyers rarely engage companies outside their own country. This in turn – as argued Hill – limits the size of capital markets and makes it difficult for investors diversification.
Better late than never
According to former Commissioner initiative with a delay. – Free movement of capital is one of the pillars of the internal market. Case union capital markets was not really long resolved – admitted Huebner. In its assessment of this is due to the fact that the EU was busy regulating the banking sector, which to a large degree contributed to the crisis in Europe.
MEP expects that beyond the removal of barriers to capital market development component of the new union will be a solution for small businesses. Special packages make it easier for them to use equity capital market potential.
– Normally, small businesses are going to have the first or the dad in the family to find the money, and then after a loan to a local bank – Huebner notes. With the new solutions could benefit from the money of investors.
The development of securitization
One of the elements of the union capital market will be also enable the development of securitization. It is the opacity of these instruments, in which financial institutions so united. bad and good assets, contributed to the outbreak of the global crisis in 2008.
Securitisation may, however, be an important instrument for the financing of the economy. – Securitisation, if it is well done, if there are guarantees for high quality watches that which is the subject of securitization, is a very good instrument for increasing its lending by financial institutions – explains Huebner. In her opinion, Poland should prepare for the growing importance of securitization, as this instrument also gain popularity here.
MEP also pointed out that due to the nature of Polish, still emerging and small capital market, it is important to watch, to design the union capital markets did not disturb us in the dev elopment.
– EU comes with adjustable when a market already in place, then we begin to create barriers. Such limitations associated with risk make sense in rich countries that are highly developed. On the other hand we are in every way a market that is still developing and more in need of stimulation, and not limitation – Huebner stressed.
PAP, abo
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