Building on, and moving beyond, the Capital Markets Union, the SIU aims to better mobilise Europe’s substantial savings to support the real economy. Against this backdrop, the latest Focus On explored how Luxembourg can contribute to an ambition that is both complex and increasingly unavoidable.
Anne-George Kuzuhara, Senior Counsellor at the Ministry of Finance, underlined the urgency of reinforcing Europe’s competitiveness amid heightened geopolitical tensions and accelerating green and digital transitions. She stressed that Europe’s challenge is not a lack of capital, as household savings amount to approximately €15 trillion, but rather fragmented markets and regulatory complexity. The accumulation of national requirements on top of EU rules has further deepened fragmentation. As discussions on the SIU advance, she questioned whether expanded centralised supervision through ESMA would address these issues, arguing instead for regulatory simplification and genuine convergence in supervisory practices.
Pension systems were identified as a potentially significant source of long-term capital for the real economy. In a discussion with Silke Bernard, Partner at Linklaters, Corinne Lamesch, Deputy CEO and General Counsel at ALFI, noted that workers in countries such as Australia, Canada and Sweden hold two to three times more risk-bearing capital than their European counterparts. While the EU has introduced frameworks such as IORPs and the Pan-European Personal Pension Product (PEPP) to promote funded pensions, early uptake was limited. Recent revisions have, however, renewed expectations that these tools could help mobilise long-term retirement savings.
Securitisation also featured prominently in the debate on the SIU. Opening the dedicated panel discussion, Frank Mausen, Capital Markets Partner at A&O Shearman, described securitisation as an essential financing multiplier, with the potential to free up bank capital, transfer risk to investors and channel savings into the real economy. Rebuilding investor confidence remains a key challenge following the 2008 financial crisis. For Paula Redondo Pereira, Head of Government and Regulatory Strategy at the Luxembourg Stock Exchange, confidence will depend on a framework that balances transparency with proportionality, predictability and international competitiveness. Michael Genser, Head of Solvency Management at Deutsche Bank, echoed this view, pointing to a persistent mismatch between actual securitisation risks and the regulatory burden applied in the EU.
The role of private capital in financing Europe’s strategic priorities was addressed in a discussion between Jérôme Wigny, Partner at Elvinger Hoss Prussen, and Mathieu Jourde, Equity Portfolio Manager at BNP Paribas Asset Management. Key investment areas identified included defence, in line with NATO objectives, as well as semiconductors and advanced technologies, energy infrastructure and data centres. Across these sectors, investment needs are expected to be substantial in the years ahead.