EU Commission presents measures for a sustainable and innovative financial system

The EU Commission presented today a package of measures to deepen the Capital Markets Union, focusing on sustainable finance, innovative financial services (fintech) and crowdfunding.

In order to make the EU's financial system more sustainable, the Commission plans to introduce a classification or definition of "sustainability" and to introduce a label for "green financial products". In addition, asset managers and professional investors should be obliged to take greater account of sustainability in their investments. The Commission will also examine whether the capital requirements for banks could be fine-tuned with regard to sustainability factors ("green supporting factor"). However, the latter step in particular is a highly controversial one, since it would mean that capital requirements would in future be based on factors other than risk. However, sustainable investments are not per se less risky, so the realignment may perhaps lead to more sustainability, but new risks to financial stability could arise. It is also questionable whether one can and should agree on a proper definition of sustainability. In any case, a uniform understanding of this is highly unlikely.

The Commission has announced a total of 23 measures on the subject of fintech. These relate in particular to the future topics block-chain and other distributed ledger technologies, on which many cryptocurrencies such as bitcoin are based. The development of these technologies will be the focus of the Commission's attention, with a closer look at their opportunities and risks. In addition, the Commission is considering to present "good practices" on regulatory "sandboxes" for Fintech companies, i. e. simplified regulatory and supervisory frameworks for these companies so as not to undermine their innovative strength.

In the field of crowdfunding, the Commission has tabled an extensive proposal for a regulation, the first of its kind to establish a European legal framework for this form of financing. It is intended to make it easier for crowdfunding platforms to operate across borders (EU passport). There will also be an EU label for the platforms. In addition, the EU Commission lays down requirements for governance, disclosure of information, risk management and supervision of the platforms.