Alexandra Jour‑Schroeder is the Deputy Director General of Directorate General for Financial Stability, Financial Services and Capital Markets Union.
Ladies and Gentlemen,
It is a great pleasure to be with to you today. My speech will focus on the future of the EU capital markets, a subject that lies at the heart of our economic competitiveness. And competitiveness goes hand in hand with technology..
We are witnessing extraordinary technological transformation in finance. From trading to post‑trading infrastructures, from risk management to regulatory compliance.
Technology is no longer a tool. If Europe is to remain globally competititive, we must ensure that our markets and all market participants innovate. We see this transformation manifest itself in multiple ways.
For example, distributed ledger technology has moved from experimental projects to tangible implementations. In 2023, over 60% of EU banks surveyed by the European Banking Authority were exploring, experimenting or using DLT solutions. Banks are developing tokenisation platforms, DLT powered trading and settlement solutions are launched and Central Securities Depositories are piloting tokenised financial instruments.
At the same time, artificial intelligence is beginning to transform the way markets’ function. Sophisticated AI‑driven systems can process vast amounts of structured and unstructured data in close to real time, identifying patterns and anomalies not visible to human operators. AI can provide supporting predictive analytics, risk monitoring and even regulatory compliance, helping financial institutions to act faster and more efficiently.
Yet, with these opportunities come risks. Technology brings cyber threat and challenges to operational resilience, while also raising important questions about transparency and oversight. There is no reason to be fatalist about this. Risk is inherent in finance and running a financial services firm or developing financial services policy, ultimately is an exercise in risk management and mitigation.
Risk management is crucial for market integrity, investor protection and addressing stability risk. As technology starts playing a bigger role in the financial services value chain, we must pay more attention to the risk inherent in these technologies. This is why the EU introduced the Digital Operational Resilience Act (DORA) to reinforce our framework for operational resilience and to ensure that financial institutions are fully capable of withstanding and recovering from cyberattacks, system failures and other technological disruptions.
Ladies, and gentlemen,
Technological advancement must go hand in hand with regulatory reforms that provide clarity, harmonisation and investor protection. We must ensure that our regulatory framework evolves alongside innovation. This is not just a necessity but a strategic imperative for the EU’s competitiveness.
If we fail to keep pace with technological transformation, Europe risks falling behind other global financial centres, with consequences for investment, innovation and talent. Conversely by rising to this challenge we can develop our markets, strenghten our competitiveness, and drive growth.
Against this background, let me turn to concrete initiatives the European Commission is pursuing to strenghten our capital markets, starting with our flagship project “the savings and investments union” (SIU).
The savings and investments union strategy´s objective is our blueprint for a successful integration of banking services and capital markets in the EU. The SIU will address current market inefficiencies. We see it as a key driver for a more integrated single market.
Because providing access to more efficient financing will be decisive for boosting economic productivity more widely – particularly if accompanied by corresponding reforms in other parts of the single market.
Since March 2025, we have started to implement our vision into concrete deliverables.
We have made a legislative proposal on securitisation including changes to the prudential framework for banks and insurers.
Just last week, the Commission adopted a Recommendation for Member States to introduce savings and investment accounts (SIAs) and we have presented our ideas to strengthen financial literacy in the EU.
We are now working with high speed on a package of proposals on market integration and supervision.
The market integration package aims to remove fragmentation in EU capital markets. This is an area where we need to act swiftly with our competitiveness goal in mind. The current fragmentation drives up costs, reduces liquidity and hinders cross‑border investment.
The aim is to cover trading, post‑trading, and asset management.
Let me give you a little “sneak preview” with a few examples of issues we would like to tackle:
When it comes to trading, we want to make sure that passporting regimes function properly and facilitate cross‑border operations.
We also want to move certain requirements from directives to regulations, to make cross‑border operations and activities less costly.
We would also like to ensure that groups in these sectors are able to fully exploit group synergies and operate cross‑border without unnecessary duplication of requirements.
And we are focusing on removing barriers hindering the uptake of new technologies that can significantly enhance capital market efficiency.
Reforming the post-trading infrastructure is a key area of action. In the post‑trading field, we see today 27 individual markets operating separately.
This does not offer the necessary scale and liquidity to finance the emerging investment needs and opportunities.
Integration efforts at the trading layer have proved insufficient in reducing liquidity fragmentation, as issuers remain registered with domestic central securities depositories (CSDs) that are not harmonised or have limited interoperability.
And this results in a lack of competition among CSDs, and thus resulting in limited scale, liquidity, fragmentation and burdensome operational complexity.
Recent reviews of our legal framework have improved the operational conditions for financial markets infrastructures in the EU. But this is not enough.
In our forthcoming legislative proposals we are aiming to include rules on financial collateral and settlement, with the objective of further removing barriers to cross‑border activity.
The public consultation supporting the savings and investments union, carried out this Spring, has given us good feedback. Stakeholders have called for a more proportionate, simplified, and harmonised regulatory post‑trade framework and to support innovation, while maintaining investor protection and market stability.
We have also received calls to improve supervisory convergence, regulatory clarity and the treatment of intra‑group arrangements.
We have well heard the message that integration of EU capital markets must be facilitated and should continue to be a market‑driven process.
Success in this area can only come from a joint effort by both the industry and public authorities. The industry already has several settlement channels available, but policymakers must help to build scale and strengthen cross‑border connections.
While there is never a silver bullet, several channels could potentially be improved or further developed
- First, the passporting for CSD services. Passporting still remains impractical due to divergent national interpretations, lengthy and burdensome procedures, as well as a lack of transparency
- Second, CSD links. Although links between CSDs have become numerous they also remain underused and are complicated to establish. They are also often limited in scope
Third, the T2S settlement, a centralised settlement infrastructure in the markets served by participating CSDs.
T2S continues to be underutilised by market participants, even if its potential to reduce fragmentation is clear.
Finally, innovation and technology will help to overcome barriers to connectivity and to streamline existing structures or processes. Digital innovation will also impact and potentially transform the way our post‑trade infrastructures operate from distributed ledger technology, to the tokenisation of financial assets to Artificial Intelligence (AI).
What I have in mind here is to address the current topic capturing attention in financial markets innovation, namely tokenization of financial instruments.
We see rapid progress in this field. Five years ago, when the European Commission presented its first DLT Pilot Regime Regulation, few in the industry showed interest in this. The predominant argument was that DLT and blockchains were for crypto, but not for financial markets.
Things have changed considerably in these 5 years. While we adopted both a DLT Pilot Regime and the Markets in Crypto Assets Regulation, the number one topic that market participants want to discuss with us now is tokenization of financial instruments and how we can unleash the potential of distributed ledger technology in financial markets.
The EU DLT pilot regime was adopted precisely to support DLT‑based innovation in financial services. We have heard your message that it is too restrictive. Also, ESMA pointed out that in its current form the DLT Pilot Regulation would not be able to achieve its objectives.
We intend to upgrade this framework to better reflect market reality.
This will be part of the forthcoming savings and investments union package.
We aime to make this framework more usable for the issuance, trading, settlement and safekeeping of tokenised financial assets.
At the same time, the industry also has the responsibility to help unlock the potential of this technology. Greater interoperability between DLT networks, stronger privacy safeguards for DLT transactions and the automation of identity (KYC) checks are some areas where more progress could facilitate wider adoption of the technology.
Let me stress that the industry has recently proven that it is more than capable of driving such change.
One striking example is the move to shorten the settlement cycle. The European Parliament and the Council have recently adopted the Commission proposal to shorten the settlement cycle to one business day following trading as of 11 October 2027. The move to T+1 is now irreversible.
This change will reshape how EU market function. It will bring tangible benefits in terms of reduced counterparty risks, greater liquidity and margin savings.
But T+1 is also an opportunity. An opportunity to modernise, automate, digitalise, and ultimately improve the efficiency of EU post‑trade markets. An opportunity to ensure that our financial infrastructure are fit for purpose, serving both issuers and investors alike.
With the publication of the High‑Level Roadmap to guide the transition by the EU T+1 Industry Committee, the market has identified the critical areas where action is needed to ensure a successful move: from standardisation of processes to the enhancement of technology and infrastructure.
These may appear to be operational details, but their impact can be transformational in terms of operational efficiency, improved liquidity and reduced risk.
Ultimately, our common goal is clear: a faster, more efficient settlement process that meets the needs of both investors and issuers.
Ladies and Gentlemen, let me conclude,
In the fast changing global geopolitical context, the EU must not only keep pace with innovation but it must lead it. The savings and investments union will not be if it is not digital.
The SIU is not merely a legislative agenda, it is a commitment to Europe’s competitiveness, to building a stronger and more resilient economy. The European Union cannot anymore afford fragmented or inefficient markets. It is more important than ever to exploit the benefits of :our :single :market.
We look forward to work together with you on this important endeavour.
Thank you for your attention.
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Savings and investments union
