How can Europe tap into trillions worth of hidden funds?

[conor_mc]

How can Europe tap into trillions worth of hidden funds?

Always a fan of Tony Connelly’s writing on RTE, but this is another great article that goes deeper than just ETF taxation policy and into wider problems across Europe with access to capital for start-ups, etc.

Thoughts?

 

[Dr Strangelove]

Tony Connelly is RTÉ's best actual journalist and they hide his content really deep on the website.

Incredible understanding of EU politics, always surprised he hasn't been poached by a bigger outlet.

 

[Itchy]

That was a great article by Tony Connelly.

I noticed a interesting and timely article on Monday, from the chair of ESMA, along the same lines:

Europe’s citizens must be incentivised to invest in its capital markets

If the EU does not create more attractive conditions for businesses and investors alike, it risks losing its most innovative companies to other jurisdictions

www.irishtimes.com

This should be backed by appropriate protection and incentives for citizens to participate in capital markets. For example, the creation of tax-advantaged investment accounts — similar to the Swedish Investeringssparkonto (ISK) — could encourage citizens to take the plunge into becoming investors in capital markets.

Such well-structured investment vehicles also provide the additional benefits of being administratively straightforward and easily accessible. They also nurture financial learning by stimulating an interest in investing.

While some countries have implemented different versions of such schemes, looking at this from an EU perspective will ensure the same opportunity is provided to the entirety of the European Union’s population and will benefit investors in terms of greater accessibility, scale, and liquidity at the EU level.

 

[ronaldo]

Interesting live speech ongoing on Bloomberg with Christine Lagarde, ECB president, talking about the Capital Markets Union and a standard set of products for investing across Europe with standard investments, lower fees and less bureaucracy.

She is also suggesting harmonized tax incentives across countries.

Talking about how poor offerings in investments means that a third of Europeans savings is in low return deposits - this figure is closer to a tenth in the USA.

The EU market is too fragmented with savings remaining, for the most part, within the savers home countries borders.

The regulation is too fragmented, with many countries having different regulatory bodies, making cross-border trading expensive.

It should be possible to reduce costs by 40-60%.

Wants a European SEC styled solution where the legal framework of one member state doesn't result in most companies wanting to incorporate in that state. For example, most in the US incorporated in Delaware at the moment

More than 50% of late stage venture capital in EU tech comes from outside the EU. This can cause these companies to, eventually, list and grow outside the EU. The funding received by these companies is also about half of what similar US companies accessing venture capital receive.