Good afternoon, ladies and gentlemen.
Thanks to Adam and the team at AFME for inviting me to speak today.
Many of you represent financial intermediaries at the very heart of Europe's financial markets. Every day, you connect companies with capital, investors with opportunities, and citizens' savings with productive investments.
Through this role, the financial industry is central to building a genuine Savings and Investments Union.
You have a unique vantage point across the system, across issuers and investors, and across the many barriers that still stand in the way of a truly integrated European capital market.
But you also see the opportunity: the depth of Europe's savings, the strength of its companies, and the potential of a larger, more integrated financial market to act as a true engine for growth in the European Union.
Today, I want to focus on that opportunity, and on why we must match it with the level of ambition needed to deliver real change. And what you can do in that regard.
Ladies and gentlemen, the Savings and Investments Union is part of a broader shift in the EU's approach in an increasingly turbulent and unpredictable geopolitical environment. One in which boosting our competitiveness has become a necessity.
This is not about closing our doors, it's about building our capacity.
The European Union must be able to set its own agenda, finance its own priorities, and match its political ambition with the means to deliver.
That political ambition is now clear and shared by all Member States, by the European Parliament, and by the European Commission. This joint ambition has been expressed explicitly through the ‘One Europe, One Market' roadmap signed recently.
It ties us to delivering, by finalising by year-end our negotiations on various proposals made under the SIU.
When we hear about Europe's strategic priorities, we often use the word “urgency”, and I am sure that word has featured often over the last two days of this conference. But I would like to touch briefly on what we mean by urgency.
The need to act is urgent. But that is not something we can trade against modest improvements.
Urgency means discipline. It means clarity about the choices before us, and seriousness about the work needed to deliver genuine change. It means commitment to change.
It also requires recognising that incremental progress is no longer sufficient, we tried that before. We need ambitious proposals, ambitious reforms, and we need ambitious outcomes of our negotiations. Our urgency cannot be met with small steps anymore.
It is about time we recognise that the cost of inaction, or indeed not doing enough, is rising, and it is about moving forward together with greater focus, consistency and determination.
Since we launched the SIU in March last year, we have acted with this in mind. And we have set out a clear way forward.
We have delivered proposals to revive securitisation in the EU, to boost equity financing, financial literacy, access to capital markets for citizens through savings and investments accounts and supplementary pensions, and a rethink of how our capital markets function across the Single Market.
We are not trying to make a fragmented system work slightly better. We are trying to build a system that works differently and is prepared for the future. One that can efficiently connect Europe's savings to Europe's investment needs, and do so at scale.
For citizens, this means better information, better access, and better tools to save and invest for the long term.
For companies, it means deeper and more diverse sources of financing, so that they can grow through the challenging - but defining stages - of their development here in Europe. To grow without feeling that they must look elsewhere to scale up.
And for Europe's financial markets it means tackling the barriers between our national capital markets, so that participation and intermediation can become easier, cheaper and more efficient across the Union.
Forty years ago, Europe made a defining choice: to build a Single Market.
It was one of Europe's most ambitious political achievements: transforming our economies, strengthening our global position, and proving that when Europe acts together, it can achieve far more than any Member State acting alone.
It showed that integration is not an abstract ideal - it is a driver of prosperity, scale and global influence.
In financial services, however, the single market has not yet delivered a seamless flow of capital and services. We are all well aware of the costs that fragmentation and internal barriers continue to impose across our Union.
The SIU will have a transformative impact, and take the single market for financial services to the next level.
As regards capital markets, the goal is not simply to connect our small markets more efficiently. It is to build an integrated European single capital market with the depth, liquidity and reach to support Europe's long-term ambitions.
This matters because Europe has been clear about the scale of its ambitions.
We want to strengthen our defence readiness. We want to lead in clean technologies and industrial decarbonisation. We want to build the next generation of digital and strategic technologies in Europe. We want to modernise our infrastructure, support innovation, and ensure that our companies can grow here, in Europe.
And we have reasons to be ambitious - our goals are achievable. Europe remains one of the most prosperous, innovative and socially cohesive regions in the world. It has strong institutions, deep talent, world-class research and successful companies.
The issue remains that too often these strengths cannot meet their true potential as they are not supported by a genuine single market that can provide them with financing at scale.
The SIU, notably the Market Integration and Supervision Package, known as MISP, has been designed to improve the pipelines that will allow capital to flow throughout the EU.
The MISP can deliver real scale, greater efficiency, simplification, lower costs, and a coherent supervisory framework. But none of that will happen if ambition does not anchor our approach to the negotiations.
Everyone in this room has a role to play in making sure that the purpose of an efficient and deep financial European capital market does not get lost.
Ladies and gentlemen, the Savings and Investments Union requires a comprehensive view of how Europe finances its economy, and that necessarily includes the banking sector.
In practice, however, Europe's banking sector operates in many respects as if the Single Market – did not fully exist. And its impact in our economy is uneven.
The sector remains deeply fragmented, with market participants having limited ability to achieve the scale that is essential for competitiveness, efficiency and global relevance.
Fragmentation does not come from one source alone. It is the result of both prudential and non-prudential barriers, regulatory and non-regulatory, built up over time, which still shape the way capital moves, or fails to move, across the Single Market.
Among the most important are those barriers that keep liquidity and capital trapped within national borders.
These constraints limit the ability of cross-border groups to allocate resources efficiently across the Union, even where doing so would strengthen diversification, improve resilience, and increase the financing capacity of the European economy.
The figures are striking. IMF, ECB-SSM and industry estimates suggest that around 250 billion euro of liquidity capacity remains locked within Member States geographical borders. In other words, a significant pool of financial capacity exists in Europe, but is not yet able to move and support the Single Market as effectively as it should.
Last year, we began engaging with stakeholders to understand what is truly holding us back, and to prepare a way forward.
In the last few weeks, we closed our public consultation and are now preparing to deliver a report before the summer break to provide a holistic and even-handed assessment of barriers to a true Single Market in banking and their consequences for the competitiveness of banks in Europe. From there, we will look to execute a forward looking, positive reform agenda early next year.
Our assessment will be based on evidence provided by stakeholders – including many of you here today. We received valuable input from over 200 contributions.
The perspectives reflect the diversity of Europe's banking sector, with some putting emphasis on simplification, others on the need to tackle prudential barriers, and others on the broader obstacles that prevent a truly integrated Single Market and the completion of the Banking Union.
Considering all these dimensions will allow us to achieve a significant simplification of our framework and maintain the resilience of our banking system.
Nothing is off the table in how we assess the barriers holding us back. As you may imagine, topics such as the design of the capital stack and the proportionality of the framework are being carefully examined and will form part of the report.
And we will take a holistic approach, trying to assess which banking sector our economy needs and how banks, and the overall economy, should better work together.
The last point I want to make today is about innovation.
Innovation cannot be treated as a periodic exercise - something we revisit every few years when a new technology emerges or a new regulatory cycle begins.
It has to be embedded in our mindsets and requires a continuous discipline. The way money is raised, traded, allocated and managed is already changing quickly, and it will continue to change. Embracing innovation is a key dimension of competitiveness.
From the Commission's side, we have embedded innovation into the Savings and Investments Union from the outset, notably through the Market Integration and Supervision package.
And when we speak about innovation, we should understand it broadly.
It is not only about new technologies. It is also about modernising the way our markets and companies' function, through reforms to supervision, trading and post-trading infrastructures, an enhanced consolidated tape, a new Pan-European Market Operator status, and improvements to cross-border settlement and CSD activity.
Of course, technological innovation is also central. MISP directly addresses DLT, tokenisation and digital assets.
We have proposed far-reaching changes to the DLT Pilot Regime to help pave the way for the larger-scale use of DLT in trading and post-trading. We have also allowed for broader DLT use in our regular settlement framework, reflecting initial lessons learned from DLT experience acquired so far. And we will not shy away to adapt the framework based on further lessons to be learned.
And more broadly, the EU was a first mover on crypto-assets through MiCA, establishing a framework for both issuers of crypto-assets and the firms providing related services.
Since then, other jurisdictions have moved in a similar direction, and the market has continued to evolve. That is why we launched today a consultation on MiCA - taking stock of early implementation experience, and assessing how the regulatory and market landscape has changed. I take this opportunity to invite you all to participate.
Digitalisation, tokenisation, artificial intelligence, data, automation, crypto, and new market infrastructures are no longer side issues. You know this more than most, but these topics are already taking up more space in business strategies, board discussions and annual reports across the sector.
For this audience, that matters profoundly. Europe's financial sector cannot support tomorrow's economy with yesterday's tools.
If we want deeper markets, more efficient intermediation, better access for investors and more competitive financing options for companies and citizens, then innovation has to be built into the way we think about our everyday work.
It must become part of the DNA of Europe's financial system, continuously driving competitiveness, resilience and the capacity to support growth across the economy.
Ladies and gentlemen, let me conclude with a clear plea for your support in achieving an ambitious agreement on the Savings and Investments Union files by the end of this year.
Europe has reached this point because, for too long, our capital markets have been shaped by national reflexes, short-term caution and incremental compromise. Those instincts are understandable. But they will not deliver the scale, depth and confidence Europe needs.
Between now and the end of the year, I will continue to argue for a steady drumbeat of ambition across the Union, ambition that matches both the strategy we have set out and the scale of the opportunity before us. We cannot allow short-term discomfort to outweigh Europe's long-term potential.
Because what we are facing is, ultimately, a generational challenge. Our responsibility is to create the conditions for Europe's financial system to finance innovation, growth and prosperity at the scale our economy requires.
We must build an environment where companies can grow in Europe, where citizens can invest in their future with confidence, and where markets can continue to support the long-term prosperity that makes Europe the best place in the world to live, to work, to start a company and to raise a family.
In markets, the phrase goes – “the trend is your friend”. But when the trend is only incremental progress, the outcome will only be incremental change.
So now is the moment to change the trend, from fragmentation to integration, from caution to confidence, and from ambition on paper to ambition delivered.
Thank you.
