Safeguarding and promoting financial stability amid economic uncertainties

Key points

1. Welcomes the debate on boosting EU productivity and competitiveness, as outlined in the Draghi and Letta reports, and calls on the Commission to prioritise a capital markets union agenda that supports competitiveness without hampering financial stability.¶¶
2. Emphasises the CMU's goal to mobilise private capital to close the EU's investment gap and act as a shock absorber, while correcting structural imbalances and regretting the persistence of a tax-induced debt-equity bias.¶
3. Recognises that completing the Banking Union is a strategic priority and notes challenges from more integrated financial markets without coherent supervision, including trade-offs between risk sharing and contagion risks.¶¶
4. Notes systemic risk may arise from smaller institutions due to correlated balance sheets, and stresses the importance of access to capital for SMEs while preserving financial stability.¶¶
5. Highlights the ECB's primary objective of price stability and the key role of the ESRB and supervisory authorities; calls for preserving ECB independence and notes risks of central bank market interventions.¶¶¶
6. Warns of risks from high sovereign debt and deficits, spillover effects to the financial sector, and calls on the Commission to enforce compliance with the EU's economic governance framework and fiscal rules.¶¶¶
7. Recognises that structural reforms and reduced market fragmentation could elevate the international role of the euro; notes ongoing discussions on the digital euro.¶
8. Emphasises the need to implement the Basel III framework, maintain its integrity, and ensure simplification and burden reduction for smaller entities without jeopardising financial stability.¶¶
9. Calls for a thorough review of regulatory gaps regarding NBFIs, including family offices and supply chain finance companies, and for reform of the Money Market Funds Regulation in line with international standards.¶¶
10. Calls for tools to capture liquidity outflows from margin calls during systemic events, and supports greater transparency and macroprudential oversight in margining practices.¶¶
11. Expresses concern about interlinkages between crypto-assets and the traditional financial system; urges the Commission and ESRB to monitor evolutions, and stresses timely implementation of MiCAR.¶¶¶
12. Calls for enhanced data-sharing and system-wide stress-testing capabilities, and for strengthened cooperation with international financial institutions to tackle cross-border stability risks.¶¶