LSEG Response to the European Commission Green Paper on Long Term Financing of the European Economy

London Stock Exchange Group has provided a response to the European Commission Green Paper on Long Term Financing of the European Economy:

LSEG believes two elements are crucial to creating jobs, growth and innovation in the EU economy:

  1. the ability of Europe’s 22 million SMEs and M+ companies to access long term financing from institutional and retail investors
  2. the ability of capital markets to facilitate this long term investment, to complement existing bank lending channels

In our view, well functioning capital markets, within an appropriate regulatory regime, can fill the long term “financing gap” that the Commission identifies. We suggest that the Commission’s long-term financing strategy should be guided by the following principles and recommendations:

  1. Offer support for SMEs across the funding escalator – action to address both education and funding gaps (e.g. LSEG’s ELITE SME coaching programme and LSEG’s range of non bank financing platforms, AIM, ORB, MOT and ExtraMOT )
  2. Embed a “Think Small First” approach to dossiers across the Commission – assessing regulatory impacts on access to capital, liquidity and innovation
  3. Act to reduce the cost of capital and the fiscal bias against equity
  4. Offer the right incentives for savers to invest in growth