Regulation is not an end in itself. It provides the infrastructure for trust, said Bundesbank Executive Board member Lutz Lienenkämper in Frankfurt at the second symposium on the regulation of investment firms in the capital markets union. According to Mr Lienenkämper, trust is built on regulation that can be applied in a clear and reliable form. Representatives from academia and supervisors spoke about current regulatory developments in the securities sector and supervisory trends in 2025. Discussions focused on topics such as the draft minimum requirements for risk management for investment firms, the remuneration regulation for investment firms and European Union regulations. 

“Europe needs more than functioning capital markets”

Europe needs the Savings and Investments Union to create a genuine link between its savings and planned investments, according to Mr Lienenkämper. He explained that some €10 trillion of European citizens’ savings are held in deposits: If only a small portion of this were invested productively, Europe’s annual investment needs of up to €800 billion until 2030 would be better covered. Mr Lienenkämper said that investments are necessary to support digitalisation in administration and the economy, for example, and to implement energy and transformation projects in Europe.

According to the Bundesbank Executive Board member, investment firms translate savings into investment by structuring products, creating liquidity and providing support to companies on the market. A functioning, fair and transparent market depends on their contribution – and on a regulatory framework that remains effective, proportionate and understandable, he stressed. The Bundesbank is working together with the Federal Financial Supervisory Authority (BaFin) and consulting with academia, he said, to ensure that rules are clear and to create trust in the regulatory framework. 

Dialogue spanning practical experience, supervision and academia

BaFin President Mark Branson stressed in his speech that the regulation of investment firms has to be efficient and effective. He said that it should be less complex and more proportionate to avoid placing unreasonable burdens on smaller, low-risk institutions. Yet despite simplifications, adequate supervisory standards must be maintained. Mr Branson emphasised that two important factors for achieving a deep and liquid capital market in Europe are simplified regulation, along with a stable and resilient financial sector. 

During the symposium, representatives from the European Banking Authority (EBA), De Nederlandsche Bank and academia discussed how the European legal framework for investment firms should be revised. 

The symposium’s participants also discussed the details of how to implement the legal requirements in practice and at the second legislative level. These included requirements for good corporate governance, minimum requirements for risk management and the remuneration regulation for investment firms. 

The experts also looked at the regulatory framework for investment firms from an academic perspective. For example, they discussed how the European Union regulation on artificial intelligence could affect supervision. The fact that standard processes do not yet exist in this field is one of the challenges involved in its implementation, according to the experts. 

This was the second symposium held by the Bundesbank’s University of Applied Sciences and the University of Basel. The symposium offers a platform for exchange between supervisory experts and representatives from both the financial sector and academia.