EUROPE – The Green Paper on Long-Term Investing unveiled yesterday represents a “good start” for an “important debate”, but it should not stop Brussels from conducting further quantitative impact studies for the revised IORP Directive, the Dutch Pensions Federation has warned.

Reacting to the long-awaited public consultation on how to foster long-term financing and improve financial intermediation in Europe, the federation said it agreed with the European Commission that it was necessary to evaluate the impact of prudential regulation and fair-value accounting on the investment behaviour of institutional investors such as pension funds.

However, the Dutch association stressed the need for a “careful process” – requiring additional QIS exercises – in drafting the revised IORP Directive.

“Otherwise,” it said, “the role played by pension funds in long-term financing projects might not materialise in the most effective manner.”

The Dutch Pensions Federation also warned that pension funds were facing a number of other EU regulatory frameworks such as the European Market Infrastructure Regulation (EMIR), the financial transaction tax (FTT) and the revised Markets in Financial Instruments Directive (MiFID II).

It argued that these frameworks would increase costs for pension schemes and impact their ability to invest in long-term projects.

Meanwhile, in the UK, Guy Sears, director of institutional businesses at the Investment Management Association (IMA), pointed out that asset management firms had long played a key role in connecting those in need of capital and those seeking a return on capital.

“As agents of millions of retail and institutional clients in Europe and beyond, UK asset managers will play an active role in the debate,” he added.

However, the Institute of Chartered Accountants in England and Wales (ICAEW) argued that the debate should not be about long or short-term finance but how businesses and governments could access finance that matched their investment needs.

Iain Coke, head of ICAEW’s Financial Services Faculty, said: “There is no obvious, easy solution to the financing challenge, but more effective capital markets, more customer-focused financial services and a greater role for non-bank finance are all parts of the solution.”

Michel Barnier, EU commissioner for the internal market, first announced the Green Paper on Long-Term Investing at the annual conference of Insurance Europe in June last year.

At the time, he acknowledged that work on insurance products with long-term guarantees under Solvency II would have a “profound” impact on the ability of insurers to invest for the long term.

“In this regard, I would like to examine the impact of our proposals, especially Capital Requirements Directive IV (CRD IV) and the Solvency II Directive,” he added at the time.

He said the same would also apply to pension funds if a similar approach were chosen.