The task of deepening the European Union’s (EU) capital markets has now become more pressing, since the UK referendum result has raised the prospect of London’s financial centre residing outside the EU, the successor to outgoing British EU commissioner Jonathan Hill has said.

Vice-president of the European Commission Valdis Dombrovskis told the committee on economic and monetary affairs (ECON) of the European Parliament in Strasbourg today: “The possibility of Europe’s largest financial centre moving outside the EU makes the case for deeper capital markets across the EU all the more urgent.”

Dombrovskis, a former prime minister of Latvia, will take over from Hill as EU commissioner for Financial Stability, Financial Services and the Capital Markets Union (CMU) from 16 July.

He said the CMU was a single market project for all member states and that it would also make the Economic and Monetary Union more resilient because integrated capital markets help to absorb shocks better.

“We will be reviewing progress on CMU next year to see what follow-up is needed to existing proposals and actions and to consider what more can be done,” Dombrovskis said.

“But our immediate focus will be to reach agreement on existing proposals.” 

Dombrovskis said he hoped work could soon be finalised to create “a prospectus regime that’s simpler, faster and cheaper for all companies wanting to raise financing on public markets”.

He said he looked forward to working with the ECON committee to further the commission’s proposals on “Simple, Transparent and Standardised” securitisation. 

“Giving consumers more choice and better quality in retail financial services will remain a priority,” he said.

The commission is now busy analysing responses to the consultation based on its green paper and intends to say what it thinks about the matter in the autumn, he said.

Dombrovskis highlighted green finance and “fin tech” (financial technology) as two areas he wanted to look at more more closely.

He added that the commission would also look at ways to encourage institutional investors to take account of sustainability considerations in investment policies.

He said the commission regretted the decision taken by the British electorate on 23 June but that they had to respect it.

He said he hoped the UK could remain a close partner but added that the other 27 states of the EU had made it clear any future agreement with the UK as a third country would have to balance rights and obligations.

“Access to the single market would require the UK to accept all four freedoms – goods, services, capital and labour. There can be no cherry-picking.”