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ISLA: Europe pushes market integration agenda
17 June 2026 Portugal
Image: stock.adobe.com/MKS
Europe is facing its most significant geopolitical and economic challenge since the Cold War, according to speakers during the ‘Beyond Borders: The New Frontier of Global Securities Regulation’ fireside chat at yesterday’s conference.
Bertrand Huet, senior partner, Financial Services & Tech, FleishmanHillard, and Jakub Michalik, chief policy officer and member of the executive committee, Euronext, covered the breadth and depth of securities finance during the session.
Setting the scene, the discussion focused on what one speaker described as Europe’s growing drive towards greater independence, following a shift in political thinking that has accelerated since the start of 2025. The conversation centred on the EU’s broader strategy to improve competitiveness, strengthen strategic autonomy, and deepen market integration.
The conversation highlighted that policymakers are increasingly viewing capital markets as a strategic tool rather than solely through the lens of financial stability. This shift is driving what was described as one of the most ambitious reform agendas ever proposed for European capital markets, spanning both trading and post-trade infrastructure.
A recurring theme throughout the discussion was the need to mobilise greater levels of private capital to support Europe’s future priorities, including defence, energy transition, and technological development.
One speaker pointed to estimates suggesting Europe faces an annual investment gap of approximately €1.2 trillion, arguing that public finances alone will not be sufficient to meet those requirements.
The discussion also highlighted the role retail investors could play in addressing this challenge. Speakers noted that household participation in financial markets remains relatively low across Europe despite large amounts of savings sitting in bank deposits.
Attention then turned to the Market Integration and Supervision Package (MISP), a legislative initiative aimed at reducing fragmentation across European markets. Asking the audience how many had actually heard of the package, a lack of hands spoke volumes and emphasised the speaker’s point.
The package represents a significant departure from previous capital markets reforms, according to the discussion, reflecting a growing political consensus around the need for stronger integration and greater competitiveness.
Digital assets and tokenisation formed another major part of the discussion.
The speakers observed that the distinction between traditional finance and digital finance is becoming increasingly blurred, with policymakers now examining how distributed ledger technology (DLT), stablecoins, tokenised deposits, and central bank digital currencies could fit within future market structures.
While Europe has positioned itself at the forefront of digital asset regulation, the speakers suggested, the next challenge is creating frameworks capable of supporting commercial-scale adoption.
One participant noted that the industry faces a delicate balancing act between innovation and fragmentation, warning that different approaches to tokenisation could create interoperability challenges. However, they also suggested that failing to innovate presents an even greater risk.
Moving on to another hot topic, the discussion moved to AI. The speakers acknowledged the significant productivity gains that AI could deliver, with one participant estimating efficiency improvements of approximately 20 per cent within their organisation by 2027. It was also a point worth making, however, that “Europe is also facing criticism for potentially falling behind in the AI race”.
At the same time, concerns remain around cybersecurity, operational resilience, and concentration risk. As one speaker observed, AI markets tend to become “winner-takes-most” environments, increasing the importance of maintaining resilience and avoiding excessive dependence on a small number of providers.
This topic ended with a key point from one of the speakers: “Europe may not have produced global AI champions at the same scale as the US, but the question now is how Europe positions itself in the next phase of development.”
Despite the challenges discussed throughout the session, the conversation concluded on an optimistic note.
One speaker argued that the pace of reform seen over the past six months has been unprecedented, with countries that were previously resistant to greater integration now engaging in discussions around stronger European supervision, pension reform, and measures designed to channel savings into capital markets.
As the discussion drew to a close, it was suggested that while many of the proposed reforms remain ambitious, momentum is building and meaningful progress is beginning to emerge across Europe’s financial markets.
Bertrand Huet, senior partner, Financial Services & Tech, FleishmanHillard, and Jakub Michalik, chief policy officer and member of the executive committee, Euronext, covered the breadth and depth of securities finance during the session.
Setting the scene, the discussion focused on what one speaker described as Europe’s growing drive towards greater independence, following a shift in political thinking that has accelerated since the start of 2025. The conversation centred on the EU’s broader strategy to improve competitiveness, strengthen strategic autonomy, and deepen market integration.
The conversation highlighted that policymakers are increasingly viewing capital markets as a strategic tool rather than solely through the lens of financial stability. This shift is driving what was described as one of the most ambitious reform agendas ever proposed for European capital markets, spanning both trading and post-trade infrastructure.
A recurring theme throughout the discussion was the need to mobilise greater levels of private capital to support Europe’s future priorities, including defence, energy transition, and technological development.
One speaker pointed to estimates suggesting Europe faces an annual investment gap of approximately €1.2 trillion, arguing that public finances alone will not be sufficient to meet those requirements.
The discussion also highlighted the role retail investors could play in addressing this challenge. Speakers noted that household participation in financial markets remains relatively low across Europe despite large amounts of savings sitting in bank deposits.
Attention then turned to the Market Integration and Supervision Package (MISP), a legislative initiative aimed at reducing fragmentation across European markets. Asking the audience how many had actually heard of the package, a lack of hands spoke volumes and emphasised the speaker’s point.
The package represents a significant departure from previous capital markets reforms, according to the discussion, reflecting a growing political consensus around the need for stronger integration and greater competitiveness.
Digital assets and tokenisation formed another major part of the discussion.
The speakers observed that the distinction between traditional finance and digital finance is becoming increasingly blurred, with policymakers now examining how distributed ledger technology (DLT), stablecoins, tokenised deposits, and central bank digital currencies could fit within future market structures.
While Europe has positioned itself at the forefront of digital asset regulation, the speakers suggested, the next challenge is creating frameworks capable of supporting commercial-scale adoption.
One participant noted that the industry faces a delicate balancing act between innovation and fragmentation, warning that different approaches to tokenisation could create interoperability challenges. However, they also suggested that failing to innovate presents an even greater risk.
Moving on to another hot topic, the discussion moved to AI. The speakers acknowledged the significant productivity gains that AI could deliver, with one participant estimating efficiency improvements of approximately 20 per cent within their organisation by 2027. It was also a point worth making, however, that “Europe is also facing criticism for potentially falling behind in the AI race”.
At the same time, concerns remain around cybersecurity, operational resilience, and concentration risk. As one speaker observed, AI markets tend to become “winner-takes-most” environments, increasing the importance of maintaining resilience and avoiding excessive dependence on a small number of providers.
This topic ended with a key point from one of the speakers: “Europe may not have produced global AI champions at the same scale as the US, but the question now is how Europe positions itself in the next phase of development.”
Despite the challenges discussed throughout the session, the conversation concluded on an optimistic note.
One speaker argued that the pace of reform seen over the past six months has been unprecedented, with countries that were previously resistant to greater integration now engaging in discussions around stronger European supervision, pension reform, and measures designed to channel savings into capital markets.
As the discussion drew to a close, it was suggested that while many of the proposed reforms remain ambitious, momentum is building and meaningful progress is beginning to emerge across Europe’s financial markets.
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