Pension funds vital for Capital Markets Union success

Pension funds vital for Capital Markets Union success

PensionsEurope has used its response to the Capital Markets Union (CMU) consultation to urge the EU to work together with pension funds in delivering the CMU.

Increasing long term investments in the real European economy is the core policy of the CMU
initiative, and this means it is vital that the CMU works for pension funds.

Many pension funds currently encounter barriers in the form of a mismatch between their own longterm
investment horizons and the short-term focus of much of the regulatory framework. Member
States and the EU should ensure that prudential and supervisory frameworks encourage long term
investments and that financial market regulation does not unduly lock capital in the pension funds.

The PensionsEurope response reminds EC policy-makers that political and regulatory risks are a key
source of uncertainty for investors and can undermine pension funds’ willingness to invest. The
European Commission is urged to identify measures to reduce political risks.

Matti Leppälä, PensionsEurope’s Secretary-General and CEO, said: ‘Pension funds already are major
investors in the European economy, with trillions of euros invested in European projects and
companies. Many pension funds want to increase their long-term investments in Europe but currently
face obstacles. I therefore call upon the European Commission and national governments to step up
its dialogue with pension funds – large and small –to identify the CMU actions which work for pension
funds and can be beneficial for all.’

Mr Leppälä added: ‘Pension funds are natural long-term investors. Under the right conditions, their
capital can make a huge contribution to the future growth of the EU real economy. As long-term
investors, they can also contribute to financial stability. However, this will only happen if EU policies
work well with and for pensions. Pension funds’ role is to provide pensions, they work in the interest
of their beneficiaries. Freedom of investment is therefore a central principle.’

Categories: European Pensions, News

About Author