A Note from the EACT Chairman
by Richard Raeburn, Chairman, The European Association of Corporate Treasurers (EACT)
By the time this article is published the EACT will have held its next six monthly meeting. We are assembling once again in Brussels, which is particularly appropriate given the amount of energy and resources we commit to the EU agenda emanating from that city. There will be plenty to discuss, both on the regulatory front and on the wider questions that have a bearing on the contribution the EACT can make to the professional lives of treasurers.
In Brussels we will be specifically aiming to generate a good debate on how treasury associations currently support their members and what the EACT can do further to act as a stronger catalyst. The leadership group of the EACT is very conscious that whilst we believe we have added great value through our active participation in the regulatory debate, for many treasurers and their national associations the impact of regulation is - despite everything - relatively remote.
That said I am writing this just after one of our regular meetings in Brussels with representatives of a number of large companies with whom we work directly and closely to debate regulation. Reflecting on the last few months, I noted that after the pronounced lull in activity over the Christmas and New Year period there is now a resurgence of work on topics on which the EACT is and needs to remain active.
Top of the list is probably the overall initiative by the Juncker team on Capital Markets Union (CMU). The European Commission’s stated objective is to create deeper and more integrated capital markets by exploring ways to reduce fragmentation in financial markets, to diversify financing sources, strengthen cross-border capital flows and improve access to finance for businesses, particularly SMEs.
The consultation triggered by the Green Paper includes areas such as: lowering barriers to accessing capital markets especially for SMEs; securitisation (addressed through a separate consultation); developing European private placement markets and venture capital; and possible changes in company, insolvency and securities law and taxation.
We will respond to the Green Paper and aim to be as constructive as we can, given the real importance of the issue around the excessive dependence on and exposure to banking markets in the EU. The EACT considers that part of the work on CMU should include a review of the legislation in place and aim to lighten the burdens on companies – especially where these neither add value to corporate activity nor reduce systemic risk within the financial sector.
Whilst we devote resources to the CMU debate we will also be looking at the continued issues around the regulation of money market funds. As I write there has been progress of sorts in the European Parliament but there is a growing body of disquiet over the compromises developed by the rapporteur dealing with the proposal. The CNAV product may have received a stay of execution but its relevance may be seriously limited and its longer-term survival in doubt.