The European Commission has published its green paper on the priorities of its proposed capital markets union (CMU).
However, although it had been expected that the paper would look at reduced capital charges on insurers' investments in European long-term investment funds (Eltifs) (IAR, 17 February, Illiquid asset funds to attract low charges under Solvency II), the document instead just asks what should be done to encourage take-up of Eltifs.
The green paper points out that regulatory barriers and other factors can restrict the flow of long-term institutional investment to long-term projects including infrastructure, which a growing number of insurers are looking at.
It also asks what policy measures could encourage institutional investors to invest larger amounts in a broader range of assets, in particular long-term projects, SMEs and innovative and high growth start-ups.
The EC will now carry out a consultation exercise on the green paper, with interested parties being asked to respond by 13 May 2015. The EC will organise a conference in the summer to assess the responses and will produce an action plan on capital markets union later in the year.
Olav Jones, deputy director general of Insurance Europe, said that his organisation welcomed the green paper, as it covered several key areas of importance for insurers, a primary example being the prudential treatment of long-term investments.
