Finance Watch responds to the European Commission’s call for evidence on the Savings and Investments Union (SIU), highlighting steps to reduce market fragmentation and support a resilient European economy. The SIU builds on the Capital Markets Union (CMU) and Banking Union, but its success depends on Member States acting in the common interest rather than protecting narrow national or industry priorities.
The CMU requires action to address structural barriers, including the creation of a single legal framework, common market infrastructure and a properly empowered EU-level supervisor. At the same time, capital markets cannot function effectively without capital supply. Strengthening retail investor protection is essential to generate trust and participation. Policies that support equity investment, innovation and productive economic activities are also needed, to counteract the trend of capital leaving Europe for the US market.
On the Banking Union, reforms are needed to strengthen financial stability and ensure the banking sector can support the green transition. The full implementation of Basel III and an effective resolution framework are essential to reduce systemic risks and prevent future crises. Safeguarding financial stability also requires integrating climate-related risks into prudential standards. Further, establishment of the European Deposit Insurance Scheme (EDIS) is needed to enhance depositor protection and foster cross-border integration.
Finally, Finance Watch warns against “false” solutions such as securitisation and the 28th regime, which serve the interests of only a narrow set of market participants rather than advancing the broader objectives of the CMU and Banking Union. A successful SIU must prioritise real structural reforms that enhance financial stability and support a resilient economy.
