Alexandra Jour‑Schroeder is the Deputy Director General of Directorate General for Financial Stability, Financial Services and Capital Markets Union.
Good morning ladies and gentlemen and greetings from Brussels.
I am delighted to kick off this interesting debate on the new European Commission’s agenda in the area of financial services.
The second mandate of President von der Leyen started in December 2024, so still quite early days. However, for us the direction of travel is clear.
We want to ensure that private investments power our productivity and innovation – in short, to fulfil the mandate we have been given as an ‘investment Commission’.
Today, I’d like to speak about the motivations behind the savings and investments union, as well as some of its possible components.
What we want to do with the savings and investments union, is to integrate and build further on the capital markets union and banking union.
The savings and investments union is not merely a rebranding of previous initiatives; we want to change the gear, we want to address the critical mismatch between savings and investments in the EU.
By tackling remaining barriers to cross‑border activities and establishing a true single market for capital, we aim to enable citizens to achieve better returns on their savings while promoting investments in key areas, such as innovation, decarbonisation, digital technologies, and defence.
Ladies and gentlemen, we are not starting completely from zero. Many of the essential building blocks are already in place: over the past decade we have collectively advanced in many areas, including in capital and banking markets.
However, there is significant room to improve, and we now have more political momentum on our side.
The need for a more competitive Europe, both internally and externally, has been widely acknowledged.
Last year we have seen landmark reports from Enrico Letta and Mario Draghi – and there have been some other interesting contributions – exactly on the topics.
These reports identify the need to resolve long‑standing issues that are preventing Europe from achieving its full potential.
The investment needs for the climate and digital transitions, and to ensure the EU’s competitiveness, are crystal clear. According to the Draghi report, a minimum additional investment of €800 billion is needed per year. It is clear that public money alone will not be sufficient.
We have to undertake an effort to develop further our capital markets and create conditions in which the vast amount of money in European bank accounts flow more seamlessly and more efficiently to meet financing needs of European businesses.
Looking ahead, I would like to sketch out today two broad policy priorities that will guide the Commission’s efforts under the savings and investments union
- First, we need to support citizens more in saving for their future, not only but also for their retirement. Let’s be clear, the EU has a great asset. EU households hold an enormous amount of savings in bank accounts – to the tune of 11 trillion euros.
This money could be put much more effectively into operation than it is today. More money invested in long‑term investments will give EU citizens a much better return on their savings for their future, particularly their retirement. It also means that there would be more investment available for companies in Europe and abroad which in turn could grow and create jobs in the EU.
To achieve this, it is vital to improve retail investors’ access to financial markets, by addressing existing barriers and creating better incentives. We have a retail investment strategy on the negotiation table and it is very important that we come out with a result that will really serve our European citizens.
In addition, it is also absolutely vital to boost financial literacy in the EU. We want EU citizens to be much more empowered and confident when it comes to managing their money. We want them to be much more aware of their options in terms of investment so they can make the right choices for themselves.
- Second, the vast investments required to support Europe’s industrial transformation in the coming decades demand a financial system that is more interconnected, dynamic, and efficient – in sum, functionable. We must look at the broader opportunities to streamline our market processes.
Currently, investors still face quite a lot of difficulties, including divergent national laws. That mean higher costs and amount to barriers to entry. On top of that, the varying implementation of the same rules and duplicated processes further complicate things for investors.
From a competitiveness perspective, this situation is detrimental to the growth of our financial sector.
The role of supervision in our financial markets is also critical to supporting a more integrated and harmonised financial system.
Of course, investor protection and prudential soundness should come first for our supervisors.
However, we must look at the bigger picture and the broader role that supervisors can play.
The Eurogroup in its March 2024 statement, and the conclusions of the European Council in April last year, invite the Commission to assess ways to improve supervision in the EU.
The goal is to achieve more convergent and efficient supervision of financial market participants across the EU.
There are different ways to get there, and you can be sure that the Commission will analyse and assess the best way to achieve that goal.
As part of the European savings and investments union reforms, we will also seek synergies between the capital markets union and the banking union.
Banks will remain key players in providing citizens and businesses across Europe with good, cheaper financial products and services.
More integrated banking and capital markets gives us greater market liquidity and greater scale. This will be crucial to ensure that Europe meets its economic and transition goals.
Commissioner Albuquerque will present her strategy and more details on the savings and investments union, which is coming soon.
However, the success of the strategy is not only hinging on the European Commission. It also depends on full participation and cooperation from Member States, common political will, and collaboration across sectors, industry, and other stakeholders.
Let me make few comments on the banking side, and the banking union in particular.
Some key actions have already been taken in creating a banking union. For instance, a large part of the banking package implementing the Basel III rules has been in application since the beginning of this year. And I am absolutely confident that these rules make the EU banking sector more resilient to future shocks.
We are also looking at how other jurisdictions implement the banking rules. To preserve the international level playing field, we have delayed some specific rules on market risk by one year.
Still, we must continue moving forward on the banking union, to make sure that the single market for banking performs better.
As we work to advance and streamline our rules, it is crucial that financial stability is taken seriously as it plays a pivotal role in our broader strategy.
Negotiations on reforming our bank crisis management and deposit insurance framework continue, with the Commission actively engaging stakeholders to reach an agreement that strengthens our framework.
With this framework in place, we should also be able to make progress on other outstanding banking union elements, such as greater market integration.
In this respect, we aim to identify a way forward on the European deposit insurance scheme, so that all depositors across the Union are equally protected.
When doing so, the Commission will take into account the need to maintain a level playing field and the specificities in national banking systems.
Ladies and gentlemen, before I come to an end, I would still like to devote few minutes on the important topic of competitiveness and how we can ensure a more sustainable economy in the EU.
Sustainability and competitiveness are both essential for a healthy economy, and our approach must be that we can support sustainable practices without hindering competitiveness.
Our EU sustainable finance framework seeks to work with the market and equip economic actors with the data, tools and standards needed to help mobilise investments in support of our environmental objectives.
Initial assessments show that financial sector and corporates are leveraging this framework to drive their transition towards a more sustainable future.
At the same time, it is also clear that the new rules and reporting requirements are not always so obvious and also come with some costs, at least in the short term.
In this context, the new Commission’s priorities are two‑fold
- First, we aim to unlock financing for the different transitions, including the green transition. This can be achieved by improving the functioning of the EU sustainable finance framework, to ensure necessary investment generation as part of our more integrated savings and investments union
- Second, this framework should support investment in our sustainable competitiveness. We want to focus on green innovations and technologies that can boost the competitiveness of the European industry
To deliver concretely on those priorities, the Commission will support businesses by making the rulebook easier to use and reducing some administrative burden we have seen in the first years of application and implementation.
We are already working towards simplifying the framework for market actors, particularly streamlining disclosure and reporting requirements.
As President von der Leyen has already announced, an upcoming omnibus package will outline appropriate simplifications, notably regarding three key legislative texts within the sustainable finance framework.
Ladies and Gentlemen, I would like to conclude my remarks by stressing that we need to work together to remove barriers and harmonise practices which can bring about a more efficient and effective market for capital.
The stakes and potential for transformative growth are high. Therefore, we look forward to work with you, with our stakeholders, politicians, Member States and industry to ensure tangible benefits for our economies and citizens.
We look forward to continue on this path, and in this respect, conferences like yours today one are useful, as they allow us to exchange our views and to design together a competitive environment for the financial sector European Union.
I wish you productive discussions. Thank you for your attention.
