EU presents Market Infrastructure Package: important stimulus for deeper capital markets

The European Commission today presented its proposals on the Market Infrastructure Package (MIP). The Bankenverband (Association of German Banks) believes this legislative package is an important stimulus to strengthen Europe’s capital markets and to move forward with the Savings and Investment Union (SIU).

“The MIP has the potential to substantially further develop the European capital markets. It is the first major step towards deeper, more efficient markets – a step we have been calling for for many years,” said Heiner Herkenhoff, CEO of the Bankenverband.

In the association’s opinion, these proposals from the Commission create a new framework to modernise trade, resolution and custody in Europe. The new rules for a uniform European regime for trading hubs based on the MiFID model would generate greater clarity and comparability. They would facilitate market-driven consolidation and pave the way for a pan-European market operator. “There is still so much potential here to reduce fragmentation and to deepen the capital markets,” said Herkenhoff.

However, ensuring the package does not lead to additional complexity will be key. “Europe is already highly regulated. The crucial question is: will it just lead to more regulation – or will we be able to use this opportunity to make the existing rules more intelligent, more streamlined and more modern?” said Herkenhoff. “The MIP must not lead to higher costs and new layers of bureaucracy.” This also applies to the proposed partial centralisation of supervision at ESMA.