Commissioner Jonathan Hill has discussed current progress towards the capital markets union (CMU) and the overall effectiveness of the regulatory framework. He identified works in progress designed to help companies in varying stages of growth:
- helping companies in their start-up phase by amending existing legislation on venture capital funds to build up scale, diversity and choice;
- using public money to catalyse private investment with a pan-European venture capital fund of funds;
- reviving Europe’s securitisation markets to free up bank lending for smaller companies; and
- overhauling the Prospectus Directive to create a simpler, faster and cheaper prospectus regime for companies that are growing.
Commissioner Hill went on to address three key themes following the Commission’s now-closed call for evidence on the regulatory framework:
- the need to apply legislation proportionately, such as making capital reporting and disclosure requirements more proportionate, rather than expressly less onerous, for smaller banks;
- legislative review of the slowdown in lending needs to ensure that it achieves its prudential objectives but does not impose lending requirements that are too high; and
- addressing the burden imposed by the complexity of rules, particularly the quantity and duplication of reporting requirements across different pieces of legislation. Commissioner Hill recognised that the volume of information being requested of firms is not always proportionate to risk.