 of movement of goods, workers, services and capital for freedoms enshrined in the EU's founding treaties. But as those seeking to borrow money for business or to take out a mortgage know, there is anything but a single market for capital in the EU today. That is despite the vast stock of capital or wealth in the block and the uncontested view, a rare thing in economics, that efficient capital allocation is vital for growth and dynamism. In order to allow capital to be allocated with less hindrance across borders in the single market, the Capital Markets Union Initiative was launched in 2015 by the European Commission and we are joined today by the civil servant with ultimate responsibility for advancing that project. John Berrigan is one of the most senior Irish people in the European Commission, leading the directorate general or ministry in equipment of the ministry in the European Commission and the title of his director general is Financial Stability Financial Services and Capital Markets Union. John will explain the importance of moving ahead of this project and will assess the state of play of the CMU implementation action plan. He will also discuss associated opportunities and challenges during the remainder of the current College of Commissioners term. Can speak for about 20, 25 minutes and then we go to Q&A with you, our audience. If you have a question, please feel free to submit it at any time, along with your name and affiliation using the Zoom Q&A function of the screen. You can also participate in the discussion on Twitter using the handle at IIA. A reminder that today's presentation and Q&A are both on the record and with that, a very warm welcome back to the Institute in this format. John, the floor is yours. Well, thank you, Dan, for the kind introduction and good afternoon to all. I want to begin by thanking the IIA, of course, for inviting me back and thank them also for giving me this opportunity to speak about Capital Markets Union or CMU, which remains a key priority of EU policy in the field of financial services. Today, I've been asked specifically to update you on the implementation of the CUMU action plan as we enter the latter stages of the legislative cycle in the EU. I'm very happy to do so because there's quite a lot going on, which also explains why I was unfortunately not able to come to Dublin for this event. But before that, I would like to spend a few minutes looking more generally at the CMU project and here I'll focus maybe on two aspects. First, the rationale for the CMU action plan, which is after all just the latest of repeated efforts to build a single capital market for Europe. And second, why progress in capital market integration has been slower than many of us, I think, would have hoped. I began my career in the European Commission in 1986, almost prehistoric times now. And that was about one year after the launch of the single market project. So I think you can certainly be forgiven for asking why nearly 40 years later, I'm here still describing CMU as a key policy priority of the Union. Now, looking back, we have undoubtedly made progress in capital market integration. By 1992, the bulk of controls on cross-border capital movements had been removed. Between 99 and 2004, many of the common rules governing EU capital markets were put in place through the implementation of what was then called the Financial Services Action Plan. And then following the global financial crisis in 2008 and 2009, those rules were deepened and expanded to new market segments. So the glass is by no means empty, but it is certainly not full. By any measure, the integration of EU capital markets has lagged well behind the integration of markets or manufactured goods and the market for labor in the EU. And as with other services sectors, it has fallen short of the benchmark set by the United States or even by some individual member states. So the question is, should we worry about this? And if so, why? Well, I think we should worry because, as you have mentioned, there is a significant opportunity cost to not having a sufficiently developed EU capital market. That is an EU capital market that is sufficiently liquid and sufficiently deep to support the EU economy. And that opportunity cost manifests itself in many ways. It manifests itself in the form of lower potential economic output due to a less efficient cross-border allocation of savings to investment, less resilience to economic shocks due to reduced scope for cross-border risk sharing. And crucially, as we look forward today, a lower economic innovation capacity due to underdeveloped cross-border financing opportunities for higher risk projects. And particularly now, as the EU economy faces historical challenges in transitioning to a new greener and more digital future, I think this opportunity cost seems even more obvious than before. So given what's at stake, why have we not seen more progress in EU capital market integration? For me, there are many factors that explain the slow pace of progress, and I'll mention just a few here. First, I think a capital market is comprised of many different segments. So market integration requires a myriad of very specific actions in each of these segments. As there's no silver bullet, capital market integration is not an easy task from a technical perspective. Second, the myriad specific actions required to integrate capital markets tend to be interrelated, so they have to be implemented simultaneously and not sequentially. For example, there's no use in focusing all our energy on boosting the number of initial public offerings or IPOs if we're not also taking measures to boost secondary market liquidity for those offerings. Meanwhile, boosting secondary market liquidity requires efficient tax treatment, securities transactions, and so on and so on. And this unavoidably dispersed approach makes it hard to build an appealing narrative around capital market integration, a narrative that can capture the public imagination. So the absence of a positive narrative means that capital market integration is not an easy task either from a communications perspective. Thirdly, many of the measures required to integrate capital markets extend well beyond the financial services field. In general, I like to see and describe measures to integrate capital markets in two broad categories. The first category are measures that aim to reduce frictions between the different national financial markets. By and large, these measures all lie within the financial services field, and so they can be negotiated by ministries of finance, central banks, supervisors, et cetera. But the second category of measures I think comprise more fundamental reforms. These kind of measures relate to those aspects which characterize a truly single market, and they include common rules in taxation, insolvency, corporate law, financial accounting, supervision, and needless to say, these more fundamental reforms typically have societal implications that extend well beyond the functioning of capital markets and therefore involve negotiations with actors beyond the financial services sector. So given the scope of necessary forms, capital market integration is not easy either from a jurisdictional perspective. Fourth, behind every obstacle to capital market integration lies a vested interest that is extracting rent from that particular obstacle. As with all efforts at market integration, the removal of obstacles brings benefits to the economy, but these benefits are typically diffuse and therefore not so obvious to the beneficiaries. Meanwhile, the costs of removing an obstacle are more concentrated among the vested interests and are readily brought to the attention of national governments and for this reason often resistance to integration outweighs support for integration. And this phenomenon I think has been particularly evident in capital market integration amid concerns in my view entirely erroneous concerns, but concerns nonetheless that an integrated EU capital market must inevitably result in reduced access to finance at the national level. So the defense of vested interest means that capital market integration is no easy task from a political perspective. And finally, it's worth mentioning how EU member states have viewed CMU post Brexit. I mean, one major effect of Brexit was that the largest part of the EU capital market, notably the city of London, moved outside the EU jurisdiction. Now, clearly the remaining EU capital market will be multipolar. That is, it would not have one dominant financial center. Accordingly, there is competition among member states to have their share. Such competition among member states can be healthy, but it can also complicate the process of capital market integration at the EU level. It's manageable, so long as member states compete on an appropriate basis. Crucially, we must have common rules for all financial centers and all member states must have confidence that those rules are being applied effectively. A member state cannot expect to enjoy the benefits of hosting EU level financial activity without accepting the responsibility of assuring and being seen to assure the necessary standard of potential oversight for that activity. This points to a need for enhanced arrangements for EU level supervision, even if not necessarily an EU supervisor. However, EU level supervision has become a taboo for many member states when discussing capital market integration. And this taboo then has tended to impede progress in other aspects of the integration process. Now, when you bring all these various factors together, they obviously complicate efforts to create a single EU capital market. Negotiations too often get bogged down in the inevitable detail that's involved here. And as a result, high level of political commitments to CMU are very often diluted when we get to the technical stage of discussions. All that being said, this phenomenon is not unique to capital markets. Indeed, EU has successfully integrated in other dimensions when the political will has been sufficient to overcome these kinds of obstacles. After all, the EU has created a single currency from now 20 national currencies, where many of the complicating factors that I've just listed were also present. So fundamentally, I remain optimistic, even if after nearly 40 years of effort, I still remain optimistic. And in this regard, I very much welcome the renewed political commitment in recent weeks to the CMU project that has been evidenced in the recent European Council conclusions in the decision of the Euro Summit to ask the Eurogroup, chaired by Pascal O'Donohue, to work on CMU and the joint declaration by the Troika of Council Presidencies, the Parliament and the Commission to implement the remainder of the CMU Action Plan within this legislative cycle. And that brings me rather neatly to the second part of my remarks, which is an update on implementation of the 2020 CMU Action Plan itself. Now, earlier I mentioned that capital market integration is very much nuts and bolts exercise. So here come some of the nuts and bolts. So far in this mandate, the Commission has made considerable progress in delivering the CMU Action Plan. We've delivered on all but one of the 16 legislative and non-legislative actions that we set out in the plan. I'm going to give you and I'm going to give you a few examples of what we have delivered so far. First is the European Single Access Point or ESAP. This is kind of an EU EDGAR for those of you familiar with the US markets. And this is an access point for companies financial and sustainability data and make investment opportunities more visible to both EU and international investors. The idea is to provide free, easy, seamless and integrated access to the information published by EU companies. And in doing so, it will make funding more accessible for European companies and especially for smaller European companies. We have amended the European long-term investment funds or ELTIF regulation to encourage the uptake of these funds. ELTIFs are designed to channel long-term financing not only to infrastructure projects but also to listed and unlisted SMEs that may need to enter capital and private equity. So in this way, they can be a complementary source of finance for SMEs beyond the banking system. We have reviewed the alternative investment fund directive. This will harmonize the rules around loan-originating funds. These debt funds will thus be more easily available to complement lending from traditional sources. Adjustments to the trading rules under the markets and financial instruments regulation on this year. These will ensure more transparency for all the parties involved on capital markets, trading, etc., including by creating a consolidated tape of trading data on secondary markets. We have a legislative proposal on the new Listing Act. This will simplify listing requirements. Again, the aim is to make public capital markets more attractive for EU companies and facilitate access to capital, particularly for SMEs. So it proposes shorter prospectuses with streamlined regulatory scrutiny and extended exemptions, changes to the market abuse regulation, clarifying and alleviating some of the key requirements, changes to the provision of investment research in method 2 to facilitate availability of research on SMEs, and introduction of new legislation on multiple vote share structures. Because this is an key obstacle that prevents entrepreneurs from using public equity markets to grow their enterprise. That is the fear that in accessing public markets, they will lose their own ownership rights of the company. So this offers the option of retaining strong ownership rights while accessing public markets. Now we're also progressing on the SME IPO fund. This is a fund which will, we hope, be a stepping stone to support SMEs access to public markets. It will target companies at pre-IPO, IPO and post-IPO stages to ensure that they get listed and that they stay listed. We will propose an initiative on corporate insolvency, one of the fundamental reforms that I mentioned earlier. Now insolvency is a complex structural and is a complex politically issue that cross-border investors systematically cite as a main cause of market fragmentation. Often when I present this I'm accused of having a sort of obsession with insolvency, but it is not my obsession. This is an obsession of the market because it turns out on the top of the list of impediments to integration every time we serve a market participant. Now our proposal seeks to harmonize targeted aspects of the corporate insolvency framework and procedures to make it easier for cross-border investors to recover value in insolvency. The latest, the most recent package we put on the table was on the 24th of May, so less than a week ago, and this concerns retail investment. For me this is one of the key deliverables of the 22CMU Action Plan because it aims to do something we've not done before, which is to develop the demand side of the market. If you look at the difference between our market and the US market, it's not just on the supply side, but it's even more so on the demand side where they have a much higher retail involvement than we do. 70% of EU savings are still in the form of retail deposits, and we need to bring some of those deposits out into market-based instruments if we're to have a functioning capital market in the EU. So the aim of this package was and is to empower retail investors to make investment decisions that are aligned with their needs and preferences, and ensure that they are treated fairly and duly protected when they do so. And we hope that this will enhance retail investors trust in the market, and so as I said, encourage them out of deposits into market-based instruments. This package includes measures to make disclosures more understandable for retail investors, to address misleading marketing, to tackle conflicts of interests that arise because of the payments of inducements, and to ensure that investment pilots offer value for money and to strengthen supervisory enforcement powers. As a complement to this retail investment strategy, we are also looking at ways to increase financial literacy among EU citizens. This is another element, an important element of the CMU Action Plan. Last year, the Commission together with the OECD published the Financial Competence Framework for Adults. This framework contains all the competence that an adult must have to be considered financial literate, and we're now working on a similar framework for young people to be finished this year, and we hope that Member States will use these frameworks to expand financial literacy within their jurisdictions. Now as we approach the middle of 2023, we are about to conclude the Action Plan, so in the coming weeks we will deliver the last outstanding legislative proposal. This is another one of those proposals in a fundamental reform area, again very highly demanded by market participants, and that is the withholding tax procedures and the aim to make them simpler and faster and to tackle fraud. We know that currently investors incur very high costs, receive late refunds, and even forgo the right to refund altogether, which in fact is a form of double taxation, so this obviously stifles cross-border capital flows and we want to address this. And then lastly, we will adopt a proposal on open finance to support more effective competition among providers of financial services, including capital market services, by accelerating data access and finance. This is not part of the 16 actions in the CMU Action Plan, probably should have been, but we didn't remember to put it in, but it is linked to the CMU Action Plan and it will support several of the CMU actions that I have outlined before. So this is my sort of work program for the last few years, and as you can see we have been busy and we remain very busy in building this integrated EU capital market. Quite a lot of work of course still remains to be done before the end of this cycle, but I'm confident we'll make it, especially considering the renewed political commitment at the highest levels, which in a sense begs the question, why is this politically little commitment forthcoming now? Well I would say that perhaps one of the very few good things to emerge from the Russian invasion of Ukraine is a wider understanding of concepts such as economic security and open strategic autonomy. Now these concepts have been around in the EU for a while, but they have remained rather abstract. They should not be seen as protectionists at all, but as addressing vulnerabilities in the EU economy through a combination of domestic production and appropriately diversified foreign trade. These concepts apply notably to capital markets. As I've said earlier, one of the EU's key economic vulnerabilities is the absence of a large liquid and deep capital market. If the EU is not to be left behind in a global economy experiencing these profound transitions, so green, digital and even geopolitical, such a capital market must be seen as a need to have rather than some kind of nice to have, which is how I think it may have been seen in the past. Maybe that unfortunately rather negative narrative that if we want to keep up, we need this capital market. If we don't, we're in trouble. Maybe that narrative is what EU capital market integration has been missing up to now. It's negative, but it's very true and hopefully it will galvanize us all to deliver greater progress in this field. Dan, I think I'll stop here, close my remarks and thank you and all on the calls for their attention.