[ad_1]
By Marc Jones
LONDON (Reuters) – The International Monetary Fund has proposed that the European Union improve transparency, regulatory oversight and insolvency rules in its proposals to create a capital market system comparable to that of the European Union. United States IMF official said.
The efforts of the European Union to create a Capital Markets Union have made little progress so far, but are seen as offering major benefits, such as encouraging companies to raise more funds through through stocks and bonds rather than depending as much on bank borrowings.
the CMU seeks to encourage companies to raise funds by issuing shares and bonds, rather than continuing to borrow from EU banks, some of which are still struggling to recover from the 2008 financial crisis .
It was launched in 2015 and is a central element of the current mandate of the European Commission, which is due to expire. However, after the project resets in 2017 and the adoption of 11 new EU laws, most European companies still get their money from banks.
the IMF is about to publish an badysis in the next two weeks about the potential benefits of a CMU and give recommendations on ways to improve it, according to Poul Thomsen, head of his Europe department.
In an address delivered Friday at the London School of Economics, he said the improvements had been made in three areas: transparency, regulatory coherence and insolvency frameworks.
In terms of transparency, the EU has proposed to create a single standardized model under the CMU for large bond issuers, to simplify matters for both companies and investors.
Thomsen said the badysis showed that publicly traded stocks accounted for only 68% of gross domestic product in Europe, compared with a ratio close to 170% in the United States. Euro area private sector debt securities represent 85% GDP compared to more than 100% in the United States
Thomsen says the IMF proposes "a major additional step (beyond EU projects) to establish a standardized and mandatory centralized electronic declaration for all issuers, and not just for large issuers,".
The fund also seeks regulatory oversight to include "post-event enforcement" to deter misbehavior and "deeply intrusive" behavior for CCPs and complex investment funds important to the broader financial system. .
However, a narrower approach could be adopted for purely equitable market parties that, in theory, should not cause much contagion if they collapse.
"I would like to stress the importance of proportionality," Thomsen said.
(Marc Jones report, edited by Mike Harrison)
Source link
