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Attracting retail investors to EU capital markets - Financing of the EU economy

Key investment incentives in the current environment

By Botopoulos Costas - Counsel of the Governor of the Bank of Greece for European Issues, Ex-President of the Greek Capital Market Commission and Member of the Boards of ESMA and IOSCO, Bank of Greece

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The current European financial environment should but cannot be considered as post-crisis. Many things have been done in the financial markets since 2009: wider and tighter regulation, which bolstered legal safety and consumer protection but also increased administrative burden for firms and venues; deep structural changes in the capital markets, mainly through the “Greek cycle” (MIFIR/MIFID, MAR/MAD, EMIR/CSDR, UCITS 4, all enacted in 2014); changes in the regulatory culture, with a focus on supervisory convergence and international cooperation. At the same time, new causes for concern have emerged: overreliance on central bank initiatives; emerging market difficulties; persisting uncertainties in the Eurozone: a commodities slump; opacity gaining momentum in certain areas. To face all those challenges Europe is moving towards a “softer”, more market-friendly and investment-oriented approach, best illustrated by the completion of the Banking Union and the emergence of Capital Markets Union. In both areas incentives for businesses and retail investors to move more freely and with possibilities of diversification towards the capital markets is of outmost importance. The process is well under way and it is extremely encouraging that the two “elephants in the room” (insolvency and taxation) are tackled together with the simplification of procedures and the boosting of the attractiveness of the European capital markets as a whole.