AIMA welcomes Capital Markets Union proposals

The Alternative Investment Management Association (AIMA), the global industry body representing alternative asset managers, has welcomed the publication today by the European Commission of the Capital Markets Union (CMU) Action Plan.

AIMA said the CMU Action Plan is an important step towards the creation of a fully-functioning capital markets union in Europe.

AIMA also said it welcomed the European Commission’s commitment to assess whether financial regulations passed since the crisis have made it harder for businesses to raise capital.

AIMA called for more research and a greater policy debate on several issues that are critical to the CMU, including provisions for loan funds, before any legislative solutions are contemplated. In terms of securitisation, another important piece of the proposal, AIMA said it hoped that the final version of the regulation could be improved to permit non-bank originators and sponsors to participate in the market while also making it easier for asset managers to invest in securitisations.

AIMA CEO Jack Inglis said: “We support both the ultimate goal of a capital markets union and the broad direction of travel that the European Commission has laid out in this Action Plan. As with all these things, the devil is in the detail. We look forward to engaging constructively with all stakeholders in Brussels as they continue to develop this important set of proposals.”

Mr Inglis added: “Our research has shown that the capital markets and their participants play a key role in facilitating economic growth and prosperity. Most policymakers now recognise the social utility of market finance, which has helped to fill the post-crisis lending gap and has enabled ordinary businesses to access the capital that they desperately need for growth. Now we need to take the extra steps of dismantling the remaining barriers to non-bank finance.”

In a paper released by AIMA last year [1], a clear link was shown between economic growth and the size and liquidity of the capital markets. A separate AIMA paper [2] earlier this year found that alternative asset managers, as providers of non-bank debt finance, play an important role in supporting small and medium-sized enterprises (SMEs) and could become a significant part of the SME funding mix within the next five years. Given bank lending to SMEs is likely to continue to decline, funding from the private debt industry as an overall percentage of total SME funding in the European Union could reach levels of 15%−20% within the next five years, according to the research.