Societe Generale President Lorenzo Bini Smaghi said that one of the major challenges for Europe once it has overcome the shock of the pandemic is that of "continuing the process of integration of its markets". Addressing the Advantage Green Forum in Venice, he said this was necessary in order to "have a competitive capital market with respect to the USA, where companies are able to find the capital to compete at the global level. "The European capital market is different to the USA's," he said via video link. "After this phase we will have lots of debt, including in the private sector, which we will have to recapitalize. "Companies can do this via the capital market, but the problem is that Europe is the sum of many little markets that together do not make a (big) one. "We all agree about the integration of the capital markets. "Then, when you get down to the details, there is always someone who opposes, because they realise that everyone has to cede sovereignty and powers. "It is necessary to overcome this, otherwise the real economy of Europe will have less support from the financial system," Bini Smaghi said as he tackled the subject of the solidity of the European banking system "The European banking system supported the economy during the pandemic, including via the system of guarantees offered by governments. "We have a supervision system that we did not have before the crisis and Europe passed the stress test. "Can this continue over time?" Bini Smaghi asked. "It all depends on how much extra capital the European regulator will admit when it is able to interpret the rules that exist. "We 'll see this for our banking system after the July stress tests".
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