Growing realisation across Europe that the financial markets are performing so-so has led to broad agreement that the capital markets union (CMU) is an important initiative. But ask member states what concrete changes the union should be allowed to bring upon them, and the unity becomes less clear. A top level policy panel at the Optic conference looked into today’s financial operations environment in the EU and UK.

The session, labelled “Capital Markets Policy Priorities for New UK and EU Administrations” featured panellists
Marcel Haag, Director for Horizontal Policies, European Commission,
Okan Pekin, Global Head of Securities Services, Citi, and
Sam Riley, CEO, Clearstream Securities Services, in discussion led by
James Kemp, Head of Technology and Operations, and CCA, AFME.

Marcel Haag of the European Commission described how the support for the purposes has a strong basis across the member nations, but that they offer a range of views on how it should be implemented. A part of his work is about exploring what political margins the EU has to push for progress. While the Commission’s starting point is always full unity, there would be some legal room for letting ambitious nations move in front of laggard member states on harmonising themselves into effective union.

Clearstream’s Sam Riley talked positively of the outlook for a cross-European move to a faster standard settlement cycle for securities trades, T+1, as America has done. He emphasised however that in itself, it is nothing like a solution to Europe’s problem of lacking growth.

The panel also looked into the progress in the area of distributed ledger technology, DLT. While it is offering to take out friction in certain areas, the move is too big to pay off in most areas when one looks at the idea of replacing the operations in full markets. Ongoing initiatives in central bank digital currencies (CBDCs) could affect the scene notably, though – an area where Sam Riley suggested that Europe should seek to move quickly.

The yearly Optic conference, in London on 2–3 October 2024, is hosted by the Association for Financial Markets in Europe (AFME). Optic stands for the “Operations, post trade, technology and innovation conference”. PostTrade 360° is there, with our coverage collected here.