EU ‘will miss UK’ amid slow capital markets union progress

Initiative has all but stalled, says Investment Company Institute president Paul Stevens

The European Union "will miss" the influence of the UK after Brexit, as progress on a capital markets union has slowed in recent times, according to the president of the Investment Company Institute (ICI), which represents regulated funds globally.

Speaking to The Irish Times ahead of leading a panel discussion at the IPE Conference & Awards 2018 in Dublin on Tuesday, ICI president and chief executive Paul Stevens said that the EU's capital markets union initiative had all but "stalled" at a time when a number of Asian countries were "focused so intently on capital markets development".

“It’s a disappointing result. I think the Europeans are going to miss the British,” said Mr Stevens, whose members have $22.7 trillion of assets under management in the US, and $7 trillion in other jurisdictions.

He noted that the UK had been a big champion of a capital markets union before the Brexit referendum.


With almost 80 per cent of funding for European SMEs coming from banks, the European Commission has been pressing for the past four years for the need of a capital markets union to make it easier for companies to raise funding in an integrated capital market. By contrast, about 80 per cent of funding for US SMEs is raised in financial markets.

European elections

The European Commission last week called for renewed political engagement and efforts to complete key building blocks of the capital markets union before European elections next May. The commission has said that this initiative, together with a banking union, are essential for the development of an economic and monetary union, and the euro.

Meanwhile, Mr Stevens, who previously worked in former US president Ronald Reagan’s administration as special assistant for National Security Affairs, said that a gridlocked Congress after last month’s midterm elections means that very little new “substantive regulation” would get through.

“There’ll be a lot of yelling and screaming,” he said, adding that Washington was “bitterly divided” in a way that he has never witnessed. “Sharp political debate is nothing new in the US, but I think the tenor in Washington is more negative than I’ve ever seen it and partly that’s the tone at the top – but it’s also a tone in the leadership of both parties.”

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times