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 The EU is looking for ways to wean the 28-country bloc from its
heavy reliance on bank financing and find other means of funding
small companies, infrastructure projects and other investment.
"The economic and financial crisis has impaired the ability of the
financial sector to channel funds to the real economy, in particular
long-term investment," said the document, seen by Reuters.
The Commission will ask the bloc's insurance watchdog in the second
half of this year for advice on a possible draft law "to mobilize
more personal pension savings for long-term financing", the document
said.
Banks have complained they are hindered from lending to the economy
by post-crisis rules forcing them to hold much larger safety
cushions of capital and liquidity.
The document said the "appropriateness" of the EU capital and
liquidity rules for long-term financing will be reviewed over the
next two years, a process likely to be scrutinized in the United
States and elsewhere to head off any risk of EU banks gaining an
unfair advantage.
The EU executive will also complete a study by the end of this year
on the feasibility of introducing an EU savings account, open to
individuals whose funds could be pooled and invested in small
companies.
The Commission also plans to study this year whether changes are
needed to help fund small businesses by creating a liquid and
transparent secondary market for trading corporate bonds in the EU.
It is also seeking to revive the securitization market, which pools
loans like mortgages into bonds that banks can sell to raise funding
for themselves or companies. The market was tarnished by the
financial crisis when bonds linked to U.S. home loans began
defaulting in 2007, sparking the broader global markets meltdown
over the ensuing two years.
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The document says the Commission will "take into account possible
future increases in the liquidity of a number of securitization
products" when it comes to finalizing a new rule on what assets
banks can place in their new liquidity buffers. This signals a
possible loosening of the definition of eligible assets from the
bloc's banking watchdog.
The Commission will also "review" how EU rules treat covered bonds
by the end of this year, the document says, a step that will be
welcomed by Denmark with its large market in bonds used by banks to
finance home loans.
Other steps to boost financing in the EU include possible steps to
aid crowdfunding, where many people contribute relatively small
amounts of money to create a sizeable funding pool.
The document said investors and asset managers also have a role and
it will propose a revision of EU rules on shareholder rights to
"ensure better disclosure of institutional investors' engagement and
voting policies".
More controversially, the Commission will consider whether the use
of fair value or pricing assets at the going rate in a new globally
agreed accounting rule "is appropriate, in particular regarding
long-term investing business models".
(Editing by Ruth Pitchford)
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