Cryptocurrency, Finance and Regulation: Can Europe Catch Up with the UK?

London is calling. As the UK has recently introduced a major reform to encourage innovation and competitiveness in the financial sector European Union regulators are now under pressure to follow suit. The heads of major financial institutions, including Zurich and BNP Paribas, are calling on the EU to take a similar approach to avoid falling behind. The demand comes as Europe seeks to strengthen its single capital market, a project that could be critical to maintaining its competitiveness vis-à-vis the US and China.

Key points of this article:

• The UK has recently introduced reforms to boost innovation and competitiveness in the financial sector, putting pressure on the European Union to follow suit.
• The heads of major financial institutions, including Zurich and BNP Paribas, have called on the EU to take similar measures to avoid losing ground to the United States and China.

Great Britain versus the European Union: two approaches to financial regulation United Kingdom under the Chancellor of the Exchequer Jeremy Hunt introduced reform which requires financial regulators support economic growth and international competitiveness . This initiative, endorsed by the financial sector, aims to make London a global financial centre innovations particularly in areas such as cryptocurrency and green finance.

In return European Union although working on the Capital Markets Union (CMU), a project launched in 2015, has not yet implemented such innovative measures This project aims to create only market capital thereby promoting cross-border investments and European access companies to financing.

In a letter addressed to the vice-president of the European Commission Valdis Dombrovskis and the head of the Platform of EU Financial Regulators Maitreya Sitharamanu heads of large financial groups such as Zurich Insurance Group and BNP Paribas urged Europe to adopt goals, similar to those set by Great Britain:

“We believe that the official goal of supporting growth and competitiveness, reflected in the management system of supervisory authorities, will help to ensure that the EU’s competitiveness remains at the global level.”

An open letter from the heads of European financial groups – Source: Financial Times

What if Brussels took London as an example in the field of financial regulation?

Challenges of the Capital Markets Union in Europe To sign, in particular Mario Greco from Zurich and Jean Lemierre with BNP Paribas, emphasize that without such an approach Europe risks losing ground to the United States and China, which are massively investing in their own financial markets.

Although the Capital Markets Union (CMU) is a priority for of the European Commission this project faces several obstacles . The diversity of legal and tax systems of member states makes it difficult to create a harmonized system. In addition, the reluctance of some countries to cede part of their financial sovereignty hinders progress.

However, the Capital Markets Union ( IBS) is important to reduce dependencies Europe from bank financing by developing alternatives such as the bond market and venture capital. It will also allow for a better allocation of financial resources risks all over the continent thereby strengthening the stability of the European economy vis-à-vis external ones upheavals .

While the UK is making great strides in modernizing its financial rules, the European Union is being urged to step up its efforts to avoid falling behind. At stake is the competitiveness of the European financial sector, and with it the ability of the continent to play a leading role in the world economic arena. The coming months will be crucial to determine whether Europe can meet this challenge and meet the expectations of market participants . Or not.