The European Commission unveiled its strategy for a Savings and Investments Union, or SIU, in March. It aims to deepen capital-market integration, boost economic growth, and sharpen the bloc’s global competitiveness. The inititative has generated a flurry of responses; the tone has not been universally favourable.
The plan seeks to redirect EU citizens’ savings—trillions of euros currently held in low-yield deposits—into capital markets, while easing financing for firms in critical sectors like technology, decarbonisation, and security. Insurers and pension funds are earmarked for expanded roles in risk capital and infrastructure investment.
Four interlinked pillars
Household savings
Encourage citizens to shift deposits into higher-return capital-market instruments, improving private pensions and funnelling more liquidity into EU markets.
Corporate financing
Simplify funding access for SMEs and strategic sectors via risk-capital markets, reducing reliance on non-EU financing.
Market integration
Remove regulatory barriers to cross-border activity for asset managers, trading platforms, and post-trade services.
Supervisory efficiency
Ensure a “level playing field” by harmonising oversight, mitigating national regulatory disparities that distort competition.
Implementation challenges
The Commission identified market fragmentation as a key obstacle. It plans to harmonise cross-border trading infrastructure, revise rules for central securities depositories, and streamline collateral and settlement requirements. While inspired by reports from Mario Draghi (ex-ECB president) and others on EU competitiveness, the strategy stops short of creating a single capital-markets supervisor. Instead, it advocates tighter convergence among existing national authorities and greater use of EU-wide tools.
For retail investors, the strategy promises simpler cross-border fund distribution and unified deposit-insurance rules. Insurers and pension funds face lighter regulations to spur investment in private equity and infrastructure, though Solvency II reforms—such as clarifying capital treatment for long-term holdings—remain pending.
Ambition and reality
The SIU mirrors the EU’s bid to become a “global economic heavyweight”, echoing Draghi’s 2012 “whatever it takes” rhetoric. Success hinges on reconciling national supervisory differences and prioritising EU-wide coherence over local interests. Without member-state buy-in, the plan risks becoming a bureaucratic burden rather than a catalyst. Insurers, as major capital allocators, could drive progress—if regulatory tweaks unlock their capacity to invest.
Differing insolvency laws, tax regimes, and enforcement practices persist. Harmonising deposit insurance, for example, requires resolving stark national coverage gaps. Similarly, fostering cross-border fund distribution demands dismantling entrenched marketing barriers. The Commission’s avoidance of a single supervisor—unlike the ECB’s role in banking—may slow convergence.
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“The SIU’s emphasis on incremental regulatory alignment, rather than centralisation, reflects political pragmatism,“ Renate Prinz and Cornelius Hille wrote in response to the Commission initiative for the Versicherungsmonitor, a benchmark-setting journal analyzing trends, challenges, and regulatory shifts in Germany’s insurance sector. „But without binding mechanisms, divergences could endure. The strategy’s success will depend on tangible gains for households and firms: higher returns for savers, cheaper capital for innovators, and fewer administrative headaches for cross-border operators. If delivered, the EU could indeed strengthen its financial autonomy and global clout. If not, the SIU may join a long list of unfulfilled Brussels ambitions.“
Single supervisor is no panacea
The World Federation of Exchanges, the global industry association for exchanges and clearing houses, has published a response to the SIU. “We welcome the ambition of the Savings and Investment Union; and call for ambition to be aligned with economic reality,“ said Nandini Sukumar, CEO of the WFE. “Real growth will come from removing barriers and giving investors the tools, incentives, and confidence to participate fully in European markets. The Single Supervisory Mechanism for banks is not something to emulate, such centralisation has not propelled EU banks into global leadership positions by market capitalisation. The EU should focus on actionable, high-impact areas such as tax incentives and investor empowerment to further growth.”
The WFE cautions that the creation of a single supervisory authority will not, in itself, generate economic growth or meaningfully attract investment to European capital markets. The Commission should, in the view of the WFE report, prioritise the following:
Tax Regime Reform
The introduction of tax-advantaged investment accounts is a strong start, but deeper reforms are essential. These include eliminating transaction taxes, reducing listing costs, and addressing the persistent debt-equity bias that discourages equity financing.
Support for Investors
Empowering retail and institutional investors with access to risk management tools, such as regulated derivatives, and reducing paternalistic barriers to market entry are essential. A balanced approach to investor protection is vital for long-term financial resilience.
Proportional, Principles-Based Regulation
The WFE continues to advocate for a shift from prescriptive, rules-based legislation to principles-based regulation that allows for a degree of divergence in how firms achieve compliance which would be a result of different and more innovative approaches to the same problem.
Market-Led Consolidation
Any efforts to consolidate financial market infrastructure should be driven by market dynamics, not regulatory mandates, allowing efficiencies and synergies to emerge organically.
Bilateral Venues
A primary focus should be on ensuring that the internalisation of order flow is properly contributing to beneficial market dynamics. In particular, as liquidity is siphoned off exchanges, which are open to all market participants who wish to trade, into bilateral trading venues, the Commission should consider how this affects liquidity and best execution.
The latest EU proposal is merely a rebranding or a repackaging of the CMU. Why would it succeed where its predecessors failed? The think-tank GIS
Skepticism comes also from top-league institutional players in the international finance. “It will take more than (the Commission’s initiative) to generate the amount of investment the EU needs to meet its growth and geopolitical challenges,“ a report by the International Monetary Fund report on the SIU reads. “A single financial market must be able to offer attractive investment returns. That requires less red tape and uniform regulation across EU states, which will lower trade barriers between them.“
Well-marketed disappointments
The world’s largest sovereign wealth fund, Norway’s $1.9tn oil fund, joined the ranks of those calling for urgent reform of Europe’s capital markets including harmonised tax, insolvency and supervisory rules to ensure the continent does not fall further behind the US and Asia in competitiveness.
“A well-functioning market in Europe is very important to us . . . It feels like there’s a sense of urgency right now [among policymakers]. We feel it too, and we’re happy about that,” Malin Norberg, chief of market strategies at the fund, told the Financial Times.
Other voices are even more critical. The Liechtenstein-based gopolitical think-tank GIS says that similar EU efforts tented to end up as “a well-marketed disappointment“. “Broader financial integration have been considered, like the Capital Markets Union launched in 2015. The goal was to establish a single market for capital to facilitate the seamless movement of investments and savings throughout the EU,“ the think-tank wrote on its website.
„The CMU would have greatly benefited from the completion of the Banking Union, initiated in 2012, among others, to promote European cross-border financial integration. Yet, in 2025, the BU is still unfinished, and the EU’s capital markets remain deeply fragmented. The EU’s well-known inertia and lack of political will from its member states could prove fatal to the SIU as well. For many, the latest EU proposal is merely a rebranding or a repackaging of the CMU. Why would it succeed where its predecessors failed?“ the report asks.
