CMU in the limelight

28/04/2022

CMU in the limelight

On 27 April 2022, the Luxembourg Stock Exchange organised its annual highlight the Stock Exchange Day (SED). This year, the overall theme was the Capital Markets Union and more specifically, Luxembourg’s role in it.

True to tradition, the 39th edition of the Stock Exchange Day gathered financial experts, decision-makers, political leaders and industry professionals to an event of though-provoking insights, market analysis and different perspectives. After going digital last year, the SED was back as an in-person event this year and took place at the Luxembourg Philharmonie.

The different speakers showcased how the Luxembourg financial centre helps accelerate the economic recovery and make Europe more competitive, while contributing to a more resilient and inclusive economy. Some also addressed the main reasons why markets in Europe remain fragmented seven years after the CMU project was announced. The war in Ukraine, geopolitical uncertainty, market volatility as well as the looming inflation and expected increases in interest rates were also high up on the agenda of this year’s edition of the SED.

CMU as a driver of the green and digital transition

Luxembourg Minister of Finance Yuriko Backes delivered the opening speech and shared her views on why integrated capital markets are key to the European economy and its global competitiveness. “Capital markets play a central role in our efforts to achieve the green and digital transition of the EU and its economy, by channelling investments and increasing access to funding across markets. Thanks to its cross-border financial services ecosystem, including the Luxembourg Stock Exchange, Luxembourg is at the heart of it all.”

Former Luxembourg Ministers of Finance Luc Frieden and Pierre Gramegna were in the audience.

The keynote speaker of this year’s edition was former ECB Executive Board Member and former Governor of the Central Bank of Luxembourg Yves Mersch. With his unique central bank perspective, he delivered a detailed speech about stagnation and inflation and the surge in public debt levels, and how the war in Ukraine is likely to affect financial markets in Europe. Yves Mersch also drew some parallels between the Banking Union and the Capital Markets Union.

Fostering a European investment culture

Later in the programme, it was time for a dialogue between Klaus Regling, Managing Director of the European Stability Mechanism and Julie Becker, CEO of the Luxembourg Stock Exchange. The two market practitioners outlined some of the benefits of integrating national capital markets into a genuine single market in Europe, and highlighted what needs to be done to strengthen the European investment culture.

Klaus Regling started by providing a summary of the main benefits of the CMU project: “A single market for capital would contribute to a better allocation of capital across the EU, which would promote potential growth. It would also increase risk sharing via markets, which would promote convergence in the EU, in particular the euro area.”

Julie Becker summarised her views in 4 Cs when she stated that “We need Capital for Climate and Crypto for Europe to remain Competitive.” Julie Becker also insisted on the cultural shift required to boost the level of retail investment in the region: “The CMU is about creating an economy that works for people. We need to make the EU an even safer place for individuals to save and invest long-term and enable them to put their savings to work for their life projects, while at the same time contributing to growth and prosperity in Europe. To achieve this, we need to build a European investment culture.”

Last SED for Frank Wagener

This year’s SED marked the last edition for Frank Wagener in his role as Chairman of the Board of Directors of LuxSE. He gave his traditional chairman’s address in which he highlighted LuxSE’s pioneering role in sustainable finance: “Sustainable finance is still gaining traction and as the home of the Luxembourg Green Exchange, our exchange continues to stay in the driving seat. The European Commission and Luxembourg with its financial sector have been very active in pushing forward the transformation of the financial system into a more sustainable one. Having an open dialogue with all actors in Luxembourg, Europe and beyond is key to reaching the global goals.”

Frank Wagener also announced that he will be stepping down from his position in the coming weeks: “It has been a great honour for me to serve the Luxembourg Stock Exchange and be there to celebrate each success that has been achieved. It has been an amazing journey, dynamic, exciting, challenging and diversified that I will hold fond memories of forever.”

Nathalie Reuter acted as the event’s master of ceremony.

The LuxSE Group is composed of the Luxembourg Stock Exchange (LuxSE) the leading listing venue for international securities and Fundsquare, its wholly-owned subsidiary specialized in delivering to the fund industry an efficient and standardized infrastructure for the exchange of information.