The chat participants explored whether there is a real chance for the concept of Savings and Investments Union (SIU) to complete the integration of the European financial market and achieve the goal to support the development of the capital market in Europe and make better use of the savings of citizens to finance the economy.

Dariusz Adamski has pointed out that initiatives similar to SIU appeared in the past, but they did not bring the expected results. He believes that the failure was caused by excessive centralisation and unification of rules across the Union, which, after the 2008 financial crisis, rendered the system much more rigid. At that point, a regulatory paradigm was introduced in which increasingly granular and uniform rules can be used to ensure not only market security and market stability but also market development. In consequence, as Dariusz Adamski notes, that reduced the room for innovation and ‘regulatory experimentation’, which are necessary for the markets to develop and adapt to economic changes.

The Deputy Chair of the KNF has said it is necessary to stop pursuing regulatory convergence only and start making room for regulatory competition, namely to create conditions where each country can shape their own regulations with more freedom than today, to adapt them to local needs and new business models. Such flexibility would help foster innovation and better adapt solutions to the reality of each domestic market. Dariusz Adamski emphasises that this does not mean a total departure from shared rules but requires a reorientation of the approach in terms of relations between harmonisation of the rules and discretion of local regulators.

Dariusz Adamski has also said that the current complexity of the relations between national and EU supervisory authorities blurs responsibility and reduces the efficiency of the system. In the current model applied in the capital market, the supervisory network involves interventions of EU-level supervisors in national supervision activities and interventions of national supervisors in EU-level supervision activities, i.e. ‘everybody supervises everybody’. This makes it difficult to clearly determine who is responsible during a crisis. In his opinion, it would be logical to adopt a distribution of powers in which entities of an inherently cross-border nature are supervised at the EU level and local business activities are supervised solely by national supervisors.

Another theme in the discussion concerned sources of investment funding as part of the new strategy. The EU is planning that one of the main objectives of SIU is to mobilise private savings of citizens. The Union would like to allocate some of those funds to the investment market, including through the development of pension and investment products. Dariusz Adamski questions this idea, though, explaining that it is tax credits that play an important role in the development of pension products. Since it is not possible to use the EU budget to that end, any such initiatives must be based on the national policy exclusively.

Finally, the Deputy Chair of the KNF expressed his scepticism towards the claim that the Savings and Investments Union would become an effective tool for capital market integration. The existing model, based on a multi-level enhancement of aversion to risk and an extremely complicated institutional system, is not conducive to development, and new initiatives – without changes to the philosophy of action – will probably bring no other results compared to previous projects. A more balanced approach is needed: a combination of harmonisation (which reduces the costs of cross-border activities) and flexibility (which allows Member States to experiment with the regulatory framework so that it can be adapted to local circumstances). Only then can European capital markets be invigorated and the potential of private savings be used in the economy.