FRANKFURT (Reuters) – Europe needs a capital markets union, including a single supervisor and trading infrastructure, to finance its digitalization and green transition, Christine Lagarde, the EU’s chief executive officer, said on Friday. President of the European Central Bank (ECB).
“It is obvious that we cannot rely on our current framework to finance these investments,” she said at the 33rd edition of the European Banking Congress in Frankfurt.
“We will not succeed in these transitions if we do not get the Capital Markets Union back on track,” she added.
According to the President of the ECB, heavily indebted member states and banks cannot find the funds necessary to make the European Union more productive and independent in an increasingly fragmented world.
According to the European Commission, the EU will need 620 billion euros per year until 2030 to finance its ecological transition and an additional 125 billion euros per year to finance its digitalization.
Christine Lagarde stressed that companies that want to digitize or decarbonize cannot access the financing they need.
Nearly 40% of people surveyed as part of an ECB survey of small and medium-sized businesses deplored the lack of willingness on the part of investors to finance “green” projects.
In addition, European start-ups attract half as much funding as their American counterparts, noted Christine Lagarde.
To reverse this trend, Christine Lagarde recommends that the European Securities and Markets Authority be given increased powers, similar to those of the Securities and Exchange Commission (SEC) in the United States, in order to replace the patchwork of current national authorities. .
“It would need a broad mandate, including direct supervision, to mitigate systemic risks posed by large cross-border businesses and market infrastructures,” she added.
Christine Lagarde also called for the creation of a single register, called in market jargon “tape”, to allow the recording of transactions in European securities.
“The creation of a European consolidated band can encourage the move towards integrated market infrastructures and larger, cross-border trading groups,” she said.
(Reporting Francesco Canepa, French version Claude Chendjou, edited by Blandine Hénault and Kate Entringer)
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