Good afternoon, ladies and gentlemen.
I trust you have had an engaging and insightful day of discussions, and I am delighted to be here to deliver the final keynote. I realise however that these conferences – while highly interesting and useful - can be intense, so I'll try to be as engaging as I can! With that in mind, let me get right into it.
Your agenda today included discussions on a number of very timely topics, including on how to overcome fragmentation in European equity markets or how to boost IPO activity in the EU. These topics are at the heart of our own work on the Savings and Investments Union – our strategy to build a more dynamic and efficient investment ecosystem across the EU.
In a time of global uncertainty and intense global competition, we must double down on what remains our greatest economic asset: the Single Market. It is our anchor in the storm – a foundation of stability and strength.
But to truly unlock its potential – both for our companies and our citizens -, we need to ensure it functions seamlessly – including when it comes to our capital markets.
The scale of investment required to drive innovation, sustain growth, and build resilience against external shocks cannot be met without a deep, dynamic, and interconnected capital market at its core. And that scale of investment cannot be met with public funds alone, we need the private sector to contribute.
A well-integrated, frictionless Single Market for capital is essential for Europe's future.
I know very well that better integration of our capital markets has been a goal of the European Union for many years. I was involved in the very first of those discussions when I was the Finance Minister of Portugal.
But we have now entered a new era of global competition, and I am noticing a greater sense of political will and urgency that makes me believe that decisive progress is possible.
Trading venues and market infrastructures will have a key role to play in this regard. They are more than just platforms – they are the highways connecting our financial system.
Since their first emergence, stock exchanges have served a vital purpose - connecting businesses in need of capital with investors ready to back them. Today, that role is more crucial than ever.
Trading venues are the central gateways to secure the long-term investments, that Europe needs, in particular in equity. And the Savings and Investments Union will aim to ensure that they are equipped to rise to that challenge.
You have spent the day speaking about the imperative need for Europe to become more competitive and for our capital markets to become less fragmented. I want to use this opportunity to offer some more perspective on the cost of not having a genuine single market for capital.
The IMF estimates that the barriers to a truly European market for capital is equivalent to a 100% tariff. This means that our companies are struggling to attract the capital that is necessary to finance their growth. In turn, it makes European capital markets a less attractive place to list, and a less attractive place to invest and trade. It causes some companies to turn to other markets, such as the US, in the hope of bigger valuations. It also reduces the diversification opportunities our investors – including retail investors - have.
But the grass is not always greener on the other side. Data shows that listing on US exchanges often does not guarantee superior outcomes. One recent study found that about 70 percent of the European companies that moved to a US listing now trade below their IPO price, versus a roughly 8 percent increase in share performance across the European market over the same period.
This data leads us to believe that it may ultimately be European markets that are able to best cater for the needs of European companies. But we need to create the right framework conditions for companies and citizens to convince them that they are getting the best deal in the EU and to encourage them to take advantage of these opportunities and to maximize their potential.
And in this regard, our fragmented markets are not as efficient as they could be – which imposes additional costs for both companies and investors:
First, our issuers are missing opportunities, in terms of the pool of investors they can reach out to, at a crucial moment where capital is needed to fund Europe's strategic priorities.
We cannot afford to be in a position where our inefficient markets are affecting the depth of our liquidity pools. As part of the Savings and Investments Union, we are actively working to bring more institutional investors such as insurers and pension funds into play to increase the depth of available capital. But, at the same time, we need to ensure that this additional liquidity is accessible for issuers across the single market.
Secondly, our fragmented markets also drive up the cost of cross border trading, especially for retail investors. This means missed opportunities and return for investors seeking cross-border and diversified investment opportunities.
And finally, fragmentation creates a dependency on third party intermediaries. And if intermediation becomes a precondition for being able to access markets on a pan-European basis - inside what is meant to operate as a single market – then this becomes a source of concern.
The interplay of fragmentation and intermediation is fundamentally altering our market structure. We are witnessing a significant shift towards internalising trading and settlement, as large players find it simpler and more cost-efficient to handle these activities in-house rather than using exchanges.
This means brokers' execution choices can be driven by their desire for simplicity in navigating a fragmented landscape, rather than strictly by the search for the best price for their clients. This is a trend we need to watch very carefully.
As I said before, these issues are not new but have for too long been accepted as normal. From my discussions with Heads of State and Ministers, I sense that patience with these inefficiencies is running thin.
Ultimately, our objective is to make the EU's trading ecosystem easier to access and to navigate, more integrated and more competitive. We strive to make investors perceive and engage with European capital markets as a single pool of liquidity, all while preserving multiple points of access.
In other words, we aim to build a genuine single market for capital in which investors and companies can seamlessly access funding and investment opportunities across the entire Union, regardless of the Member State in which they are located.
I want to mention two measures that the Commission has put into place already and that will be crucial for delivering on the objectives of overcoming fragmentation and making listing in the EU more attractive.
Since March last year, our updated EU rules on financial markets have opened the door for something we have long needed in Europe – consolidated tapes. This will give investors a full and integrated view of our markets and where liquidity is, and it closes the gap with our international peers.
Getting these tapes up and running is a central part of the Savings and Investments Union and a top priority for the Commission.
ESMA is currently in the process of selecting the provider for the bond tape, with a final decision expected by early July. The selection processes for the equity and derivatives tapes will follow soon after.
In parallel, my services and ESMA are working together on the necessary technical rules to support this new framework. For the market, now is the time to prepare and to start planning the changes needed to be ready when the tapes go live, in line with the timeline agreed by the co-legislators.
Another major capital markets reform adopted in Europe was the Listing Act, which aims to create a listing ecosystem that makes it attractive, affordable, and rewarding for companies to list their securities on EU public markets.
The good news is, most of these new measures are already in effect, delivering tangible relief for businesses right now.
We are working on further technical standards to ensure these rules go even further in minimising burdens, while at the same time increasing liquidity and capital supply for our listed companies, making EU public markets more competitive.
Let me mention a couple of additional important measures that were very recently proposed by the Commission and that are also relevant. On the 21st of May, we adopted a fourth simplification omnibus package, which includes a Commission Recommendation on a new definition of small mid-caps. As a result, we are amending certain EU rules, including MiFID II and the Prospectus Regulation.
As part of our work on MiFID II, we are proposing a revised and more targeted definition of small mid-cap companies. The objective is to support the development of SME growth markets by allowing these small mid-caps to count toward the threshold required for a multilateral trading facility to be classified as an SME growth market. At present, only traditional SMEs are considered for that purpose. Under the proposed changes, at least 50% of the companies listed on these platforms would need to be either SMEs, small mid-caps, or a combination of both — making these markets more dynamic, attractive, and reflective of the broader European growth ecosystem.In parallel, under our Prospectus Regulation, we are making it easier for these small and mid-cap companies to raise capital by giving them access to a simplified, short-form EU Growth issuance prospectus - saving them both time and money.
But our work cannot stop here, and further ambitious steps will be required.
We have already started the hard work of turning the Savings and Investments Union from vision into reality - and we are moving fast under a tight timeline.
We have launched informal workshops in order to engage with the community of exchanges and we are keen to continue that conversation. This is a conversation about barriers and what still fragments our single market. I also encourage you to share your views through the ongoing public consultation, which remains open until 10 June. Your feedback will be essential in helping us shape a system that truly works for Europe's markets.
In that context, I would like to briefly touch on market driven consolidation and interoperability between market participants. When we speak about fragmentation and barriers, this is a big part of the problem – how players along the same value chain too often fail to work efficiently with each other. At times, this reflects deliberate choices: a reluctance to open up to broader competition, a preference for preserving niche positions and localised liquidity — even when this comes at the expense of scale, efficiency, and market integration
Despite the progress we've made in recent years, Europe's trading and post-trading infrastructures still face too many barriers (and sometimes vested interests) to fully benefit from our Single Market.
This holds us back - not only in terms of cross-border efficiency, but also within groups that operate multiple trading and post-trading platforms. And serves no one, neither our investors nor our companies.
By improving how our infrastructures connect and operate together, and effectively compete, we can reduce fragmentation, lower costs, and boost efficiency across the board. Those objectives are at the core of the Savings and Investments Union. This also means embracing innovation - from distributed ledger technology and tokenisation to AI - and making sure our rulebook keeps up with how markets are evolving.
Looking ahead, the Commission will bring forward a bold legislative package later this year to better connect Europe's trading and post-trading infrastructures. We will aim to cut through the cross-border barriers that still fragment our markets, modernise outdated rules to reflect today's technologies, improve execution quality and price formation, and reduce unnecessary red tape. And where it makes sense, we will move from Directives to Regulations - so that the benefits are felt immediately throughout the Union.
As part of our broader consultation, we are also looking at the question whether our current system of financial supervision is still fit for purpose.
With markets becoming more interconnected, we are exploring whether a more European approach could help us do better – by reducing fragmentation, cutting through unnecessary complexity, and making sure the rules are applied more consistently across the board.
A more unified system could also help supervisors spot and respond to risks earlier – protecting both investors and the financial system as a whole.
To conclude, ladies and gentlemen, let me emphasise once again: we cannot allow ourselves to be held back by internal inefficiencies or fragmentation. We must recognise — and seize — the full potential of a truly integrated European capital market. I am counting on your continued engagement, your insights, and your leadership to help us move from vision to reality.
Together, let us take the next steps to make Europe the most attractive place to list, to invest, to innovate – and ultimately, to thrive.
Thank you.
