Barney Reynolds (London), partner and Head of the global Financial Institutions Advisory & Financial Regulatory Group, spoke at the Chatham House “European Capital Markets: Expanding market-based finance for sustainable growth” conference on March 21, 2016 in London. 

Liquid and connected capital markets are crucial to Europe’s growth prospects. The EU’s roadmap for Capital Markets Union (CMU) is an opportunity to remould European markets and channel investor capital into asset classes that can deliver returns as well as drive economic growth, but how can it deliver on its ambitious vision? 

The conference considered the political and economic obstacles to achieving the goals of CMU and the implications of potential EU reforms. Participants discussed and assessed the practical challenges for creating a single capital market, channelling investment to foster growth, and reviving trust at a time of increased volatility in global markets. 

Reynolds participated as a panellist during the “Ever Closer Capital Markets Union” session, which assessed the proposal for Capital Markets Union (CMU) and the challenges ahead for reviving EU stock, bond and securitisation markets, reducing the over-reliance on bank finance, and creating optimal policy and regulatory frameworks to foster economic growth. Discussions focused on how an investment culture can be fostered in countries typically averse to investment risks; how market-based finance can be expanded to reduce the predominance of bank lending relative to other sources of financing; how a single capital market can enable cross-border risk sharing and work for all types of asset owners to connect capital to real economy sectors in need of investment; what types of monetary and fiscal policies are needed in Europe to manage financial stability risks and ensure that any integration of capital markets is appropriately regulated and what does a potential 'Brexit' mean for the financial services market and for Europe’s capital market reforms.

The session was moderated by Sharon Bowles, Non-Executive Director, London Stock Exchange Group and Chair, Economic and Monetary Affairs Committee, European Parliament (2009-14) and other panellists included James Esposito, Co-head Global Financing Group, Goldman Sachs; Niall Bohan, Head of Unit, Capital Markets Union, DG FISMA, European Commission and Elizabeth Corley, CEO, Allianz Global Investors.