Deutsche Bank boss urges faster progress on European capital market

European Union

The chief executive of Deutsche Bank has called for urgent progress to be made towards the unification of Europe’s capital markets.

Speaking to a conference in Germany’s banking capital Frankfurt, Christian Sewing outlined the need to reduce the remaining bureaucratic hurdles between the individual states of the European Union in order to give companies more opportunities to raise money. Consumers should also have more opportunities for cross-border investments, he said.

He described a common European capital market as “the prerequisite for us to succeed in the transformation to a sustainable economy.”

Loans and financing for companies are mainly granted by banks in Europe, unlike the US, for example. The EU Commission’s plans for a capital markets union have been on the table since September 2015, but their implementation has stalled.

Sewing spoke of the need for “a reliable, uniform set of rules for 27 countries,” instead of the current position of 27 distinct sub-markets.

He called for conformity over insolvency, securities and consumer rules, for example, and said “we need a banking and capital market union that also includes a reliable deposit guarantee fund.”

He said that a revival of the European securitization market was “an essential step for a stronger capital market,” and stressed the need to help banks to lend.

“It is simply a matter of converting sound loans into securities,” he said. “That would relieve the banks’ balance sheets, which have to meet high capital requirements, and thus enable further lending to the economy.”

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