 So welcome to the first panel on capital markets union and post trade integration, where are we heading? I think that's the hundred million dollar question or euro question today. And we're here really to take stock. We have an hour to do that, to take stock of how far we've gotten, what we have achieved. We heard some of this in the speech and where we need to go from here today. As mentioned, we'll have, we have an hour, we'll have minutes, we have about ten minutes at the end for questions from the audience and we will have interactive questions during the panel, during the panel session as well. And with that, let me quickly introduce, although they are known already, but let me quickly introduce the panelists with me here today. I will start to the left with Olivier Gershon, Director General of Financial Stability, Financial Services and Capital Markets Union, European Commission. And from 2010 to 2014, you were head of the private office of Michel Barnier, Commissioner for Internal Markets and Services. At the far left, my far left, Alexandra Hachmeister, she is the Chief Regulatory Officer of Deutsche Börse Group, which she joined in 1999 in various different positions since then. And she's amongst others, member of the Group of Economic Advisers to ESMA. To my right, Alberto Giovannini, Chairman, MTS Markets, previously served as the Co-Chief Officer of Unifortune Asset Management, SGR SPA and of course Chairman of the Giovannini Group and Principal Policy Advisor of the Cezami Group. And to the far right, Michael Cole Fontaine, Chairman of the Association for Financial Markets in Europe and Chairman of Europe Middle East and Africa of Bank New York, Mellon. We just had a speech on where the Commission stands with this plan to make the Capital Markets Union a reality. And with that, Alberto, I would really like to ask you what should be the highest on the agenda for Europe to reap the project benefits swiftly? Yeah, that's a very difficult question. I know. And I'm going to avoid it. I have to say that I have to explain the audience where I'm coming from. I have been involved not on Capital Markets Union, but on a project that came right before heading in a high-level expert group on infrastructure finance and SME finance and long-term finance, of which many of the outputs went into the CMU project. And I want to share the views that we had at the time when we were thinking about this challenge. Many, as I say, the topics that we see in the Action Planning and Capital Markets Union, we'll discuss in that group. Bankruptcy rules, passporting for assets, one interesting point that we made. SME financing, infrastructure financing, and so on. There's a lot of overlap. The question that was discussed at the time, and I think the question that you're asking now, is, well, you have a number of initiatives which all strike as very sensible, very appropriate. Is there a logical sequence? That is, do you have a hierarchical? Can you identify a hierarchical order of these initiatives? Or is there a chronological sequence? Some things need to be done before for other reasons, not necessarily having to do with importance or things of that nature. And I have to say that we struggled with these questions a lot. And we were really unable to come up with a convincing answer. So it seems to me, and I seem to be observing that also from the speech of the commission that Olivier gave today, that the approach is, let us push forward what we can, sometimes in parallel, and let's try to get as much done as possible. And I think that that, unfortunately, is not very exciting, but it's my pointed answer to your pointed question. I'd like to add a couple of other things, which I hope will come back with the rest of the panelists later on. Also, President Draghi pointed out how important is financial integration in Europe for the euro system. So the impression that I have is that the CMU project, which has been carried out very professionally by the commission and certainly explained to the public to the max, according to the way the commission operates, is a project that is extremely important and overarching. So the challenge will be to involve the widest possible set of interested parties, including citizens in this thing, because of its importance. And the ECB has a role. Maybe we should think a bit of what else could the ECB do. Of course, C2S has been an extremely important aspect of this, but I think that we have to think about that. And finally, last point, if I can, the concept of integration is, if you think about it, a very deep concept. That is, markets are integrated when people feel confident in investing in place A versus place B. Similarly, they don't have problems. And if you think about what are the factors impinging on that confidence, you quickly come to the conclusion that one very important factor is the business environment. And the business environment is not just bankruptcy rules. It's much deeper than that. And it involves many differences that, in many ways, characterize our member states in the euro area and the European Union. So that's one important part that I think somebody should take on. We talked about this in the group that I mentioned before. And that is something that goes down to member countries. I think that unless we have business environments that are equally welcoming foreign investments, or similarly welcoming foreign investments, across the Union, we can't really talk about integration. We can't really talk about asset classes that contain securities issued from different countries, but they are asset classes, so they're large and liquid. So we do have to worry about that, too. And that's another challenge that I like to add to the list. Thank you. Olybita, turning to you, in terms of the pushing forward, do you see any initiative that might need more fast tracking rather than parallel? And to the last point, how could we get more support for foreign investments? Is this something that you're also thinking about in your plan? Yeah, well, I think we need, I agree with everything Alberto said, and actually the Giovanni Barriers became a sort of common name. And that is true that his works inspired, to a great extent, the Capital Market Union project. So why are we doing it? We're not doing it because we are nerds of the internal market. We think we're here to build the internal market for the sake of it. We're doing it for several reasons. First of all, for reasons of resilience and financial stability. We work on one leg, the banking leg. There's nothing wrong about that, except that when its leg is damaged, you don't work at all and that we could see during the crisis. So the Capital Market Union project is not about decreasing the amount of bank financing to the economy. It's about complementing it by more capital market funding. Secondly, resilience also. We need deeper and more liquid markets. Alberto just alluded to it. It's not only that they're more effective, it's also that they're more resilient. That we need to do as well. Thirdly, we need Capital Market Union to increase the overall amount of funding to the economy. Of more, more diversified, I just alluded to it. That's also more adequate funding. Not all companies need a bank loan. A number of companies, in particular those that are the most promising in terms of growth and jobs creations, need equity. And equity is something that's a lot more complicated to find for a company in Europe these days, especially in continental Europe than a bank loan. So second remark, this Capital Market Union project is a long-term complex project. Because as Alberto said, the point is to move forward to open, if I can't take this image, 100 taps in various houses in order to finally get water in the garden and for the garden to flourish. So you indeed open the tap that you can open easily for a start, and then you turn to those that are more remote or more difficult to open. I would say this cross with impact is what guide us in terms of what we do. We do what we think we can achieve, and we do what we think we can achieve relatively quickly. At the beginning of the project, I remember that Lord Hill was questioned. I mean, he was told, oh, the Capital Market Union project is not ambitious enough. And Lord Hill said, oh, you want me to be ambitious? I can be ambitious. So let's go for a single supervisor for Capital Market. Let's go for a single securities low and a single bankruptcy low in the single market and maybe a couple of other things that I cannot think about immediately. So that would really be ambitious. The problem is that would be stuck in the Council and Parliament for the next 15 years. So the reality is that would not be ambitious at all because we would achieve nothing in the real world. So the choice we made was to do what we think we can achieve, even what it's tearing, and to refrain from grand design that may be very nice and perfect on paper, but do not work. So to conclude, back to your specific question, what I think is important in what is ahead of us. First of all, to complete the pending work. This is a stream in Capital Market Union we almost never talk about, but we have a pending work. My colleagues are meeting several times a month. They're colleagues of national administrations in member states to identify with them national barriers of all nature to investment. And there are a number in financial regulations and outside of financial regulation. Some of them are there for a good reason to protect other legitimate public interests. But we need to see together whether it needs to be at the same time such a problem for cross-border investment or whether we can find less problematic ways of reaching the same protection of public interest. And some of them are there for no good reason, I can tell you. Second, I think we need to move forward as soon as we can and as quick as we can with the second chance chapter 11 type proposal that the Commission made. The charm of it is that instead of trying to harmonize the bankruptcy law in member states, what we have been doing is, OK, fine, keep your bankruptcy law. But let's complement it in all member states with a module that you can paste on whatever is your national bankruptcy law in order to be less destructive of value in insolvency proceedings. Third, and there is no order of priority in what I'm saying, we need to repair what my colleagues in the GFISMA call the funding escalator. We need to identify what is preventing companies at the various stages of their development for getting access to the mix of financing they need. And that mix is different when you're a young startup than when you're going international or when you're growing in size later on. We want to go in the stock exchange, et cetera. So what are the key impediments of the various stages? Another thing that I'm specifically interested in is what's the problem in managing the transition from one mix to the other? Because what you can see is that this is an area of fragility for companies when they have to transition for a mix of financing to another one to fuel their growth. Small caps, mid caps. And finally, last point, we want to achieve something that is, again, less ambitious than the organization of securities law. But it's something that we think would help capital market union a great deal. It's to be absolutely clear on the applicable law. So what is the applicable securities law at any point in time for any investor? If you could achieve that, in a way, it doesn't matter so much that you harmonize the law. But at least you know where you stand. Which is the judge that is in charge if something goes wrong and you know what are your guarantees? So you've just mentioned startups. Alexandra, if I turn to you, Deutsche Bros has been quite active in financing initiatives. What do you think is needed specifically? What are the activities needed within the CMU specifically for startups to improve their financing? I think we need to distinguish between the legislative framework that can really go a long way in providing a growth-friendly environment. But there is the need for private or market-led initiatives to fill that gap. And Olivier Garçon has just referred to the funding escalator and the different needs. And we all know, if you look at the SME space, that that's a broad space and that there are really different types of companies that have different needs. And from a market infrastructure provider perspective, what we have done is basically looked at, where do we see missing pieces? What are really the impediments that we're facing? And if you look at, in particular, not the startup phase but the growth phase for companies, which is really important to that fraction and then to grow and to provide the drops that Europe so desperately needs. We have created around 18 months plus ago the so-called Deutsche Bros venture network. And the idea behind this network is to interlink companies who need gross funding with international investors. And actually it's much more than just linking them, just providing a network and companies and investors can somehow meet. I think what you need to create around it is more supportive actions for these companies. And this includes, for example, management trainings. This includes sharing of best practices in terms of how do you manage and fund a company that is coming from a startup to a gross stage. So it's really about identifying what they need. And to give you a figure here, the Deutsche Bros venture network has been in place since June 2015. And the companies that are part of this network have received up until now a billion Euro in funding. So obviously the idea of connecting those in a trusted environment has worked pretty well. But I don't think it's anything that we can say okay, we're done yet, not at all. So if we think of the funding escalator, there are other bits and pieces or building blocks that we need to define. And they start really early on. If we think of how can we support startups and really getting their ideas ready, it's about building the relevant fintech centers. Another thing that we're doing here in Frankfurt, for example. But it's also about an initiative that will start in March this year. And we're about to launch a new segment, in particular, TailorMate, for those small and medium-sized and gross companies in particular. And again, as I just described with the Deutsche Bros venture network, it's not just about creating a segment. It's really about creating the relevant ecosystem around it. Really thinking about it, if we want this to be liquid markets, if we want this to be transparent markets for investors and supporting the gross companies, what do we need? And there are, for example, tools that you can use such as mandatory research reports that will definitely help get protection out there and also the liquidity that's desperately needed. So I very much agree with what we have heard so far. I think there will be, there needs to be done a lot of work on the legislative front, but what we also need is really in dialogue. And this is how the Deutsche Bros venture network came into life. In dialogue with the relevant parties, really develop and understand what will help the most. And are you aware of any of such initiatives on the European level as well, or is that more national with a national focus? We have started with a national focus. Nevertheless, I think we see similar initiatives across Europe. And if you look at the different countries and the different needs, you will see that, for example, startup financing in Germany is not a big issue. If you're just a startup, you will have great access to financing possibilities that might be different in different European countries. So again, I think is what we should ideally do in Europe is really identify best practices, look at them and see, do they fit our market, are they fit for purpose? So, Christine, just to add to that, certainly at AFME, the Association for Financial Markets in Europe, we're always listening to the commission's call for industry participation and then trying to mobilize effectively and efficiently to make recommendations and solutions. And as Olivier has indicated, that shortage of risk capital for Europe's high growth businesses is absolutely essential. And at AFME, we produced a report that went to exactly the point that you're making, looking country by country, what are the sources of equity capital available for small and medium-sized enterprises. And I think the message here today is that partnership between the industry, as Alexandra was just indicating, and the commission can be very helpful in driving this agenda forward. And if we now turn to the audience, as a setup for the next question on the panel, I'd like to get your views on what is most needed to facilitate the establishment of the CMU. So you're seeing behind me the questions on which you can vote. And hopefully, that was not the right question. It's the one on greater involvement. Yes, that's it. What is most needed to facilitate the establishment of the Capital Markets Union? You've got four options, greater involvement and collaboration of the market, quicker adoption of new legislation to address risks and market needs, a more innovation-friendly regulatory environment. And I see, all right, it was 100%. It's gone down all of the above. But we have a clear winner. I think we are. You're going to have to debate afterwards. You don't have to vote. We're voting as well. All right, I think we've basically established, pretty much, if I'm looking at it. It is more than half of saying all of the above, which is going to make the next question more interesting, because we've got the regulatory aspects. Some of it is in place. And I'm going to turn to Olivier again to ask you how much has been implemented, how much still has to be implemented, and how can we bring forward the structural changes really that are needed? OK, well, I think I would agree. I didn't vote, but I would have voted all of the above as well, because it's fairly straightforward. However, I doubt in the financial sector that we can fasten so much the pace at which we adopt regulations. You have to remember that we tried our wrong. But under the leadership of Mr. Barnier, we get 44 financial regulations adopted in less than five years. So that's fairly quick, I can tell you. The average speed is less than two years for a regulation or a directive. And I doubt it's difficult to make a serious legislative work in the European context in much less than this. Maybe we can get a few more months, but that's not very significant. What is more significant is the tendency of co-legislators to kick the can down the road through so-called level two and three. And that, I think, is an issue where we need to be honest with ourselves. We have a tendency in Europe to over-specify level one, so the legislation. If you look at something that's the closest substitute, if I may say so, the United States, they specify a lot less the legislation. And there is a reason for this, is that they trust more their supervisors. So they basically tell them, well, this is what we expect from you, and now you get the ball and you have to score. We, for many reasons, we don't trust the institutions that we also have created. The European level distresses the national one and the other way around. And all these results in an over-specifying level one. And the result is that we're not mobile. And when I had to negotiate with the US the equivalence for CCP clearing, one of the issues was the margining policy. The US had the possibility to modify it. They didn't, in the end, we found other solutions, but they could modify it. So we could discuss. If I had been willing to modify all margining policy, I would have had to go back to the parliament and the council. So that's two years, and you can negotiate. And that also answered your questions. Basically, everything is in place. But some of the level two and three is not. And that's not meant to be a criticism to the agencies because they're doing really a great job under difficult conditions. But it's complicated. I mean, if you look at MIFID, we have to postpone the implementation of MIFID one year because simply we are not able to produce the amount of level two that is needed. Is it so problematic? I don't think so. I think it's better to have it right than to have it quick. But it would be even better to have it right and quick, of course. But if you think that we were basically nowhere back in 2010, and if you look where we are now, I think Europe made extremely good progress. And I think we can even say that we're probably the area in the world that moved faster in designing, adopting, and implementing its regulation. But of course, there are a number of things that we should still better. Now, going to the future, well, the view of the European Commission is that markets need previsibility and its stability. We have just gone through a very massive overhaul of the regulatory framework. And my personal view is that before we would propose to change fundamentally anything in this, I would need to be convinced that it doesn't work. If it's just slightly suboptimal, could be better, et cetera, my take would be leave it as it is, let markets adapt. Because you cannot complain, markets do not invest long term if you change the rules of the game every other day. So change only what doesn't work. And this is basically what we were trying to do with the call for evidence that I referred to earlier, is to find what is really not working. Where are the negative cross interactions that makes that something you thought were making perfectly sense in your CCP regulatory framework happens to be a disaster for banks or the other way around? And if there are such things, or there are such things, well, then fix them in a targeted way and very quickly. I thought the rest do not touch to the regulatory framework. Does that mean we have nothing to do in the future? No, I don't think so. I think there are a number of things we can do. We can, in particular, better our interaction with the rest of the world. One of the key novelties in the new regulatory framework is the equivalent system. The equivalent system is super complicated. And it's super complicated. For one reason is that you have a different equivalent system for each instrument, for each regulation. And there are differences that have to be because of differences in the instruments, of course. But there are a number of differences in process that do not have to be. They're simply here because they were negotiated by different people at different period of time. That I think it would be welcome if we could fix that and streamline the processes. I think that would help business. I can just interrupt you there for one second and ask Michael from the industry perspective, obviously. Is there anything that's so broken that you need to fix it? And if so, well, what can the markets and the industry do to help the structural changes and help to fix it? I think the industry feels things are largely fit for purpose, but we do need a period to digest and implement. And exactly as Olivier says, let's not change anything unless it's really creating a very significant impediment. One of the issues that we hear is maybe not yet an impediment, but it's potentially a growing impediment. And that is the increasing requirement for CCPs for margining purposes to have cash. Most pension funds do not have cash. They are often long securities, government securities. And their inability to be able to post those securities with market infrastructure for margining purposes creates a challenge, particularly at a time when maybe banks are contracting their repo activity. So as we look at the call for evidence, there are the unintended consequences of regulations that affect market operations, market liquidity in certain segments, and then can have consequences on the underlying sources of supply for capital markets, union investment, the pension fund. So that might be an area where calibration is needed, and certainly those points are getting well-made to the Commission in response to the call for evidence. And I think the most important thing is that when there is a call for evidence, we as industry participants do respond and we're proactive in engaging and building the capital markets union. This is not the Commission's capital markets union. It's our capital markets union. And I think we have to be really, really reminded over and over again of that point. Would you care to add something from your perspective from the report? Not anymore. I said that before. It's an extremely important, ambitious, and essential project for progress in Europe. And therefore, we should try to maximize participation. That's what we should think about. And today's a good occasion to discuss this. And the next question to the audience, again, setting the stage for the next question is, let's see if we get the right question. Yes, how much progress have we made in removing the Giovannini barriers? Good progress, limited. And there are more barriers now than in 2001. I think the view seems to fluctuate around the fact. I mean, the positive news, let's start with the positive. We don't have more barriers now than when we started in 2001. Well, 11%. Some do things. But we do have limited progress rather than good progress for the majority of participants here. On the other hand, quite a few things have been done. We have CSD regulation. We've had the launch of Target 2 Securities. And I think we should also mention the fact that the brain behind the Target 2 Securities is sitting in the front row with Gertrude. So thank you for being here, both of you and Mark, and for having launched this. But Alexandra, if I'm looking at this from the perspective of CSD regulation, Target 2, what are the most challenging, given that we've done so much in that environment, what are the most challenging barriers from your point of view that still remain? I think what we see in the combination of Target 2 Securities and CSDR is a combination of market-driven solution versus regulatory-driven solution. And we have heard in the beginning that the two actually were quite well aligned. And as you all know, probably, we are in only a week's time, our two CSDs are going to join the fourth wave. And I can only say that we're really looking forward, knowing that for almost 10 years in a collaborative approach, ECB and the industry and the era system have worked so intensively together to really overcome those barriers. And if you really would like to put it in a simple picture, what T2S does is cross-border settlement basically becomes domestic settlement in the idea of the single market and the single currency. So I think with T2S being fully in place by the end of this year, I think we're really making great progress and overcoming those barriers. So I think, yes, we have made good progress. If you add to that the CSDN regulation that also fits the other bits and pieces in there, what I think, and this has been in the debate already on the panel, is what are really the challenges that we're facing? Is it insolvency law? Is it fiscal regimes? And in order to really create deeper markets, we need to tackle those. And as I understand, and probably all of you would like to comment on that, it's not always about overhauling or creating a complete new legislative framework because we know that it has taken really some time and we haven't gotten there anyway over the last two decades. But it's really about identifying relevant tools as you've just said about the insolvency regime. Relevant tools that can get us there without going through the long and really painful process not knowing where we end up. I want to turn to you. Given that 60% of the audience said we've made some progress, but not good progress, or what are the barriers that you believe are meant and where would you say they need to be acted upon, given that you and your group worked on these and gave your name to these barriers? To give some of the audience some perspective. If the first report that we produced was a child, right now we'll think about going into university, all right? So a long time has gone by. And at the time we were thinking that when the child turned three, the project will be over, will be finished. All right, so years for disappointments. But it's interesting that the child hasn't died. And it's still alive, all right? And a number of groups, I just want to remind you because it's interesting, they produced MOG, Monitoring Group, CESAM-1 and CESAM-2, Clearing and Settlement Advisor and Monitoring Expert Group, FISCO, FISCO-compliant Expert Group, T-Bag, which has got nothing to do with T, Tax Barriers Business Advisory Group, the Legal Certainty Group, ECME, Expert Group on Market Infrastructure, EPTG, European Post-Trade Group, and now EPTF. And that's good, it's not bad, it's a good thing that all these groups did work. And I actually, I had given me the liberty to commend Werner Freyjaus right here, who participated and pushed for many of these groups because people kept the momentum and the work going. Certainly T2S has been the sort of real disruptive change in this progress because it's been concrete, all right? And so how do I view the progress or the lack of progress? The way I say it is as follows. In particular, EPTF, the last group, is doing some great work, mentioned also by Olivier before, which is very wide ranging and very detailed, that really allows us to get a clear picture of what the situation is. But given this situation, which is obviously multifaceted and quite complex having to do with very different asset classes, including derivatives, not an asset class and the like, I think what is interesting is to ask what will bring about the actual working of T2S? And I expect that the actual day-to-day work of T2S will make the remaining barriers more evident, more obviously in need of change and correction, including the hard ones that have to do with ownership of securities, as Olivier was saying before, and taxation issues, which will become, as T2S gets to work really, will become really much more evident. So I think that that will be a mechanism for momentum, a very important one. And I actually have to say that I rely mostly on that, although I don't want in any ways to discount the excellent work of EPTF, which again will make suggestions on other areas. And in fact, it is of a view that other barriers will be identified. That's the 11% that we saw before. So moving on to the EPTF that you've also mentioned, what are the findings? And are we on track? You're aware that they will publish the reports, it's great, so I don't want to spoil the show. I can tell you what they've been doing. I mean, I concur entirely with what Alberto just said, I mean, they're really doing a very deep and excellent job. They started by doing a state of play, a mapping. So I mean, in a way, they have a more educated answer than the general public to the question, where are we with the German in barriers in post-trade, because they've made a lot of extensive research on this. They have moved now to phase two, which is assessing the extent to which post-trade developments and regulatory reform have accurately addressed the Giovanni Barriers, or actually other barriers that may have emerged since. And in the case of new barriers, whether there are some that have emerged as a result of the regulatory reform, which is something we are specifically interested in in the framework of what we just discussed. And if we did something wrong, we should fix it. So without pre-empting the final conclusion of the group, because they're still working, I can say that the experts in the group seem to agree that certain barriers were successfully removed, and that in particular, what we just mentioned, T2S and the harmonization of settlement cycles have had a key role in this. They also seem to find that there are a number of new barriers that have emerged in the last decade, and that there are some barriers where problems remain, and I mean, Alberto very accurately just named them. Withholding tax procedures, for example, securities ownership rules are some key barriers that have been identified long time ago by Alberto and that are still there. And maybe the shareholder rights directive gives an opportunity and a vehicle for addressing some of these issues. And in addition to the points raised, I think the other issue that needs review is the segregation of securities accounts as well. Certainly investors want to be able to use their securities positions for mobilizing collateral, but at the same time, we need to ensure the integrity and safety for and on behalf of the end beneficiary investor, and so reconciling those two, I think is gonna be really important as well. And from a market's perspective, are any of the new barriers linked to digital innovations? And that's really a question to you from the market side and also to you, Alexandra, from the infrastructure side. Well, I think certainly new technologies give us the prospect of new tools to deal with some of these issues and certainly should be absolutely embraced. And regulation is not technology neutral. So I think there are going to be plenty of opportunities for us to improve the way in which regulatory information gets applied by the industry to our regulators and to our supervisors. But, Alexandra, you have an intervention. I think just coming back to what you just said, I think if you look at the capital markets industry, there are basically two drivers, and these are technology and regulation. And as you just said, they're not neutral to each other. They're interlinked, actually. And technology, if we now move a bit away from regulation, I'll come back to that later. If we move to technology, it has always been a source of structural change for markets, and that's what we can see for decades in our industry. And if we look from a more general perspective right now, what we see in the FinTech and in the Racketech space and being clear that those champion efficiency and transparency with their business models, you see that this wave of new technology can definitely support overcoming barriers. So I think there is, they do have the potential and hopefully the creativity to really go in that direction. What we see though is that the structural change, the pace of that has increased in the recent years. And that's probably due to a mix of capital, regulatory and business model factors that are changing the ecosystem. And we have heard it in the speech this morning that in particular we'll also need to look at the enabling capacity of technology. And I'm talking here about distributed ledger technology or blockchain. So, and I think the market should really embrace new technology and really try to dig deep to understand what is the potential in overcoming barriers in delivering efficiency and also in supporting risk mitigation. And you've just provided the need in terms of segregation and collateral management basically. And I think as an institution we have a few initiatives that we are advancing right now. And just one of them that fits with your comment is the so-called liquidity alliance ledger. And that's basically a cooperation of four CSDs that are coming together trying to develop a functional prototype to ensure efficient cross-border collateral movement. So obviously, and knowing this brings me back to the point how is regulation and technology into twin. Knowing that in particular and the whole debate around collateral scarcity, how can we make it available? How can financial institutions with the regulatory requirements do that most efficiently? So having said that, I think there's a direct link between regulation and technology and what it can really bring to us. And I think there's a lot of use cases out there. You have another use case that we've just a few days ago announced which is on the so-called colored coin that we're working on, or the cocoa, how we call it. And it's basically about riskless transfer of commercial bank money based on a distributed ledger infrastructure. And ideally that could be, for example, a CCP because then again, taking regulation and the regulatory framework that we have already into play, if you do that through a regulated infrastructure and if you use that to enable the technology, what you get is an existing rulebook. You get existing processes. You get existing interaction between market participants and a central infrastructure. So I think there's great marriage and really embracing the technology and its capabilities. Knowing that we can, first of all, try to make really use of its capabilities in the existing regulatory framework but keeping in mind that it actually might alter the regulatory framework. So we'll get, obviously, a debate around if market structures change. Does this require a regulatory answer? Yes or no? That's something that we'll see. And we're going to ask the question, Dr. Turki. You've mentioned it in your speech. It's an opportunity. There's also clearly risks associated. What does that mean for you from a regulatory standpoint? Well, I think the... But the problem with any nascent technology or innovation is you shouldn't regulate it too early and you shouldn't regulate it too late. And that's the big problem for the regulator, really. So I'm quite fond of the concept of sandboxes. I think it's a great way to reconcile the two. So you don't take too much risks because for as long as these activities are small enough, I mean, you basically keep them under an ad hoc, special scrutiny regime, so you don't need to regulate them. Now, in a single market, at some points, and maybe if your fintech originates, say, in a small member state, maybe you will quite soon need to address consistencies abroad, outside of your national market world. So for this, one of the things we want to foster in the frame of the task force that I mentioned earlier is to get the supervisors to exchange information about what they have in their sandbox so that when there is a need for, say, a Luxembourg fintech to go through address German audience, because simply the market is not big enough in Luxembourg for the type of product that product, they can carry over onto the German sandbox and be sort of co-monitored by the two supervisors. And at some point in time, of course, you will need to regulate. First of all, to get a full risk when the activity is big enough, when it's stable enough. You may also need to foster some form of standardization because in distributed ledger, for example, the way it is going for the time being, it's good that you have always this period where you don't know what is the standard that is going to prevail, but if it lasts too long, you may have more fragmentation than anything else. So all these questions are there, but my natural inclination would be not to regulate too early. But of course, we need to get the supervisors to watch it very closely because it's very disruptive and it can be very dangerous in some cases. Looking at a different perspective now, both Michael and Albert, we looked at and talked about insolvency law, taxation, company law, talked about regulation. Where do you see the role of the private sector also and how much self-regulation should there be, can there be, do you think is useful? Well, not in the topic that you listed, seems to me. Frankly, there is a dialogue whenever there is a regulatory initiative and I think that that dialogue should be exploited to the maximum. But in many of these issues, it's difficult to have sort of very strong, positive role for the private sector because innovations of one kind or another normally entail significant investments. They entail scrapping old ways of doing things and we see this in the banking industry after the recent wave, the recent, the not so recent now wave of regulatory initiatives. So for this reason, I think, if you go ask any random private sector person to take initiatives in reforming things, they'll be sort of reluctant as a matter of principle, I have to say. So I think that what we need to think about it instead is a proper dynamic, a proper interaction between those who'll be affected by regulations and those who produce the regulations so that such regulations are the most efficient. And I have to say that in this proper dynamics, sometimes there is also a question of timing and sometimes I have observed in the past a relatively slowness in the public sector's way to react to suggestions or initiatives of the private sector because the processes are so complex and the processes, especially in Europe, involved several actors. And so each one of these actors is a little bit cognizant of its own responsibility and therefore cautious, which altogether slow the process of change significantly. So we should worry a bit about that, too. I mean, I've seen this in particular with respect to the technical standards of email for one thing. And so that's the area where I think there should be concrete initiatives rather than a sort of blanket involvement of the private sector, per se. I think the other thing to observe is that neither side wants to be captured by the other. So certainly we need to make sure that absolutely regulators and supervisors and policymakers have clear insights into understanding trends in innovation and particularly disruptive innovation. But at the same time, the innovators don't want to be captured by the regulators too early. And so it's very heartening to hear Olivier's comment from the commission's perspective that let's create the sandbox, the safe space for both parties to observe each other and to play together in a very constructive way. And I think that should work very effectively and very efficiently to advance the process on both sides. And that open, transparent approach should also be very constructive. A very good example of this sort of public-private national competent authority partnership is operating in Belgium. So inspired by the Ministry of Finance in Belgium, the incubation of market infrastructure innovations within the Beehive Innovation Complex, I think will create innovations and ideas in the spirit of that public-private regulatory partnership that could be really very constructive and guide a way forward in what are intensely complex and interrelated ecosystem supply chains. Follow up on a different angle. There's also been some concern about unintended consequences of EU financial regulation and we've heard quite a bit of all the regulation that came. What are the major concerns and what can everyone do and how can we work together to ensure the stability of the European financial market? Maybe I'll try and take that one. I mean, the big elephant in the room of course is the fact that a member of the European Union the European Union is leaving and that in itself potentially creates the seeds of market instability and we need to ensure that and I think this, the image that Olivier painted of the European Union walking on one leg. Olivier, you don't walk on one leg, you hop and we must absolutely ensure that the integrity of the European Union is maintained through this period of potential political instability and that does not spill over into financial instability. So the urgency with which capital markets union, the second leg to enable that walking and indeed running and flourishing needs to be bought into reality as soon as possible and I think from a market stability point of view I'm not sure we can emphasize the urgency of that enough. So I think that is something and I would certainly urge if there isn't already a Brexit response work stream within the capital markets union project then there absolutely needs to be because together we are responsible for the financial well-being and health of 500 million European citizens, savers, depositors, investors, current pensioners, future pensioners and we all have a duty to ensure integrity and market stability through this time of great change. I second that very strongly. I also would like to point out another political angle of this project which I think is important to remember but again Olivier in the speech that he read I think demonstrated that the commission's got the right attitude towards it. It's very important that a project like this is not seen as another European reform for the bankers, the asset managers and the hedge funds. There's nothing like that. Again in our earlier report, the title that we use was finance for growth and this has to be seen as a project that allows people to live better because they get more access to resources in their own initiatives and allows investors to make more informed and efficient decisions from their perspectives and it's a mantra that really has to be repeated a lot because this is in the interest of the people and we have to sort of resist the general, I say general and I maintain general unfortunately, view that these things that we're doing in rooms like this are just for the interest of few privileged European citizens, very important. And Marc just mentioned the private partnership schemes and you've certainly been at the heart of one of them, the T2S, is there a better way to work in private public partnerships? Is there something you would enhance? Any concrete suggestions? I think first of all, as I've initially said before on this panel, I mean we're talking about collaboration over a decade, so there will always be ups and downs, I think that's all about partnerships also, not only in the private life, but I think it is a great example because if you look at how many jurisdictions, how many institutions are involved in such a project and really getting that just from an organizational perspective over the long time spent developing the relevant IT infrastructure, ensuring that the relevant participants are ready, testing that, getting everyone ready and then finally going live, I think it is definitely an excellent example of such a collaboration. What I think is, and I would like to echo what we've heard before is I think, actually the European Commission provides ample opportunity to really engage in dialogue with every legislation that comes out there and even before the legislation comes out that we have consultations. We have the possibility to comment, be it on the call for evidence, be it for example on a prospectus regime, being it now through the CMU midterm review, so there is the possibility to engage and coming back what the two of you have just said, it is I think up to everyone to really take that chance, we need to deliver and that brings me back to an earlier point you had on who do we do this for? This is for the European citizens to be really clear and this is not an artificial exercise or some intellectual discussion that we can have and then leave this room. I think it's really about taking the responsibility and what we see right now is if you look at the political challenges that we're facing and we're an election year, I'll go to the ballot box this year, myself and my home country. So I think if we want to have an answer for the Europeans, it's really about providing a perspective and solving economic grievance and we can only do that if we really make the capital markets union work. So that's a great task and that's a task that's on our shoulders. So before we open to questions, maybe a final question to every panelist so that we get the perspective both from the markets and the authorities. What should be the priorities of the next two years, Michael, starting with you. To be ambitious and to take the report of the European Post-Trade Forum really seriously and as has been commented here, a lot of excellent work has been done. AFME will be organizing on the 18th of May, its 10th annual post-trade conference, the theme being safe and efficient post-trade time for action. So I think let's be ambitious and let's not leave this conference without a commitment to the next actions that we're collectively going to take. This is absolutely a time for both responsible and responsive leadership and we need to be courageous in these next steps. Two points. First of all, I repeat what our audience suggested. All of the above are the priorities in the sense that everything that has been started should be pushed forward and everything that is ready to start should start. But also, I repeat something I said before, we should really broaden the participation of the public to this project with the right angle. And this is going to be very important for the momentum, including the momentum in the decision phase by authorities. So that's a very big challenge, something that we should think about. The ECB should also think about it, the commission and every interested party should think about share ideas on this. My first remark that the Capital Market Union was about more resilience was about more funding, more adequate funding for more growth. And all this is for the citizens, but there is another dimension is you could also see the Capital Market Union as addressing a market failure. We have probably more saving in Europe now than we ever had. We are an aging society. We need these savings to be invested in long-term projects in order to bring stable yield of a long period, while they have at the moment a huge appetite for short term. At the same time, we have probably more investment needs than we never did. And they simply do not meet. The Capital Market Union is also about making the two ends meet and that would be good for people, that would be good for the pensions and that would be good also for the competitiveness of Europe through better and more productive infrastructures. So I fully agree with Alberto. We need to keep the momentum in the next two years. You know, in the last 90s, my friend David Wright brought the Financial Services Action Plan. It was for part at least the same thing as Capital Market Union. And it started enthusiastically. And then when we entered the tough things, the things that the member states want to protect because, I mean, all these barriers are here for a reason. Don't be mistaken. They protect somebody somewhere. And if they are in place, that means that somebody is close enough to the power in that member state. So that faded. And that faded because member states thought they had a choice. They thought they could have the growth without doing the job. I think what has changed is that they should be under no illusion that there is still a chance now. And even less, now that you're right, Michael, the elephant in the room is Brexit, the biggest wealth financial center is leaving the EU and nobody knows what is going to be the relationship in the future. So that calls for keeping the momentum, bringing forward Capital Market Union on the continent big time. Alex, Andrew? I think it's hard to add something to what you've all said. So I can pretty much support. And I'm in particular with Michael saying that we need to remain ambitious. And I think there are two ways that you can look at Capital Markets. The one is in providing the funding that we need for the growth. But the other way to look at it is in sharing the growth with the people. And this is the, that we often phrase as the pension time bomb that's ticking. So I think the Capital Markets have two ways to support the growth that Europe needs. And with that, if I could open the floor to questions and ask you to state your name and where you're from and also who you're addressing the question to, that would help. And I think we're going to need an icebreaker. They want coffee. Or you want coffee, but there won't be any coffee until we've had a couple of questions. That's a good question. Thanks very much. Thank you for the panel. So I'm Michael Mortensen from the Dansker Bank. My business is basically providing post-trade services to the financial parties in the Nordic region. And as you know, it's taking a while to implement EMEA, for example. So my question to you is that in my area, it's really difficult to plan investments. Which initiatives do you think would be necessary to nourish participants to enter the financial service industry to provide post-trade services? I think it's addressed to you. Well, it takes some time to implement EMEA. That's true. I mean, it takes the time that was foreseen, basically, because it's complicated. It needs to be down. It has been down. We have the review coming on in order to check whether there are key impediments. And you're very welcome to nourish this. Apart from this, I mean, if the market doesn't take up, I don't want again to go on the PTF would-be conclusions. The part that is within our responsibility is to check whether we got it right with the balance of incentives, basically. This is what the EMEA review will be about. It's not down, so I cannot tell you really. But if you have ideas, I mean, it's basically about you. I say, you're far better placed than I am for this. And it's related to what Michael said a moment ago, the Capital Market Union. We try to provide the structures that huge market participants will have to colonize to make it work. And the risk we're taking is that we don't provide the right structure, in which case, we'd like to know pretty quickly so that we can change it. That's my best answer. I'm sorry. Gottfriedowitz, Chairman of the European Ripple and Collector of Council. And it's specifically to Olivier, because Michael mentioned that the repo market is being damaged. And yesterday I had a meeting with the CGFS in London. I have more meetings in the coming weeks. We have seen that the DNA of the financing market, repo market, has been broken. And we have the evidence the end of the year. You're getting a report of 14th of February. Now, I'm a member of the EPTF. I see the work. We see new barriers. We've seen all barriers kind of disappearing. But we need much faster action. We cannot wait for the EPTF final report, capital market union. We need action because already now, end of the first quarter, we see financing at minus 6.5% for the quarter. So can you, in the commission, get faster two, three months to fix this? Because it's NSFOR, LCR, CSDR, SFDR, the whole alphabet. Have you got the helicopter view now? Have you got the power to move forward? Never mind the member states. Never mind the central banks. Yes, yes. Yeah. Alberto wants to answer, but yes, indeed. When there is evidence, in the very specific case of repo markets, we have taken a number of steps, including, it's a secret, but not implementing fully, faithfully, the basal framework, in order precisely to prevent what we thought was damaging to the repo market. If you think this is not enough, fine. But then, when you have a number of things that are, the number of the damages are in anticipation of what market participants thought the framework would be. Now we have put out our proposal in December. It happens that in this respect, it is different from what Basal asked because we thought Basal calibration of NSFOR, in that case, was not fit for purpose. If you think it is still, we're not still spot on target, well, say it, but say it in a targeted way because these things are extremely technical. And between what works and what doesn't work, there is a millimeter. So we're very happy. It's now the right time. I don't think anybody in the co-legislators wants to get it wrong. I think it's clear that the European Parliament and the member states, they made numerous declarations saying that they wouldn't shy away of changing a calibration if they thought the Basal Committee got it wrong. But we need evidence for this. We need to be explained what you think gets wrong. We need to check it with the rest of the market. But that can be done very quickly. And that can be changed in the legislative process if it's needed. Is there a question at the back? Yes? Good morning. My name is Gilbert Verdean. I'm behind the effort to create an ISO standard for distributed ledger technologies. And mainly that was driven for regulation to allow it to be regulated. I guess the question is from the panel, what do you want from this standard? Well, certainly, we applaud you working on an ISO standard for distributed ledger technology. And I think we'd all welcome learning more. And I'm sure many in this audience would welcome learning more. It needs to be safe, trusted, and reliable. And anything that an ISO standard can do to ensure that confidence in distributed ledger technology can be further enhanced so that we can implement it into mainstream financial services. Indeed, even central bank financial servicing would be very helpful indeed. And certainly as we think about how distributed ledger technology can help with system resilience, if we in particular think about recovery and resolution planning, keeping a distributed ledger of either payment transactions or securities transactions that can, that is continuously kept up to date, not disputed and can be unplugged from the institution that is failing and plugged into the institution that is going to survive. I think that would be exceptionally helpful. So best wishes with the development of the standard and do keep us all updated. How do we find out more? Do you have a website or something? Anything to add? I think I'd like to close the panel by thanking the panelists and also really reiterating the three key messages I think we should all take away. The first one being it's our CMU. Every single run in the room, all of us. It is not some kind of a project. It's for us to make it happen. So it's everyone's responsibility. That leads to the second point really about the partnerships. It is about dialogue. It's about building bridges like we're doing today. It's the private sector, the public sector. It's the dialogue that's going to lead to constructive answers. And that would be my final point. And Olivier made that call for action when there are consultations answer. It's the best way to shape. And as Michael said, let's all be ambitious. That's what we have to do to deliver. Thank you very much.