The underdeveloped occupational pensions market in Europe is a barrier to the creation of a Capital Markets Union (CMU), according to commissioner-designate Jonathan Hill.
Hill also backed proposals to finance the European Insurance and Occupational Pensions Authority (EIOPA) through a levy as he answered nearly two dozen further questions put to him to him by the European Parliament’s Economic and Monetary Affairs Committee (ECON).
The UK’s nominee to Jean-Claude Juncker’s commission last week failed to win over MEPs and has been asked to appear at a second hearing tomorrow, ahead of a vote to confirm him as commissioner for financial stability, financial regulation and the CMU.
The former leader of the UK House of Lords was asked to detail his “vision of a well-regulated and integrated” CMU and reiterated he hoped the foundation would be laid by 2019.
As a result, he said, it would be important to build a single European market for securitisation, personal pensions and green bonds.
He said the “rapid” adoption of proposals for the European Long-Term Investment Fund (ELTIF) would provide a useful means of facilitating investment.
He also identified investors’ home bias as holding back the development of the CMU and said “underdeveloped” occupational and personal pensions were also acting as barriers for the creation of one of Juncker’s key policies.
Hill further endorsed plans to overhaul the funding of the European Supervisory Authorities (ESAs), including EIOPA.
Currently funded directly from the EU budget and national regulators, Hill said it was “sensible to look at alternative sources” at a time of tight public spending.
He also rejected the accusation that funding the ESAs through a levy was taxation “through the back door”, a point initially put to him during last week’s hearing.
“A fee for a service – in this case, supervision – is not the same as taxation,” Hill said.
“We will carry out a thorough assessment of all possible options, including wide consultation, before coming forward with a legally sound approach.
“My intention is to involve this House fully in this work.”