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Sustainable Development of Capital Markets in the Baltics Could Open New Opportunities for Regional Businesses

Date

2021 10 01

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More than 200 international and Lithuanian experts and decision makers in finance and economics gathered in Vilnius today to take part in the 8th International Financial Markets Conference “Developing Capital Markets in the Baltics”, which was organized by the Ministry of Finance of the Republic of Lithuania, the European Court of Auditors and the Association of Lithuanian Banks.

Minister of Finance of the Republic of Lithuania G. Skaistė stated that Lithuania, Latvia and Estonia had signed the Memorandum of Understanding and agreed to create a pan-Baltic capital market aiming to deepen regional integration of capital markets, make the Baltic states more visible to foreign investors and to increase SMEs' access to broader financing possibilities.

“Sustainable business financing is part of the Government’s agenda, so we foresee lots of measures: ensuring the growth and maturity of Fintech sector, the revision of the tax system, also discussing the possibility to introduce the Investment Savings Account model, bringing state-owned enterprises to the stock exchange, consolidating the Lithuanian National Development Agencies into a strong single body. The development of capital markets is at the core of this effort.  At present we are actively working on a few pan-Baltic initiatives: the Baltic Capital Markets Development Accelerator Fund, unified regulatory framework for covered bonds in the Baltic States and getting three Baltic States rated as a single region in international indexes”, said Gintarė Skaistė, Minister of Finance of the Republic of Lithuania.

Member of the European Court of Auditors R. Šadžius noted that fast pace reforms are needed to achieve efficient EU and Baltic capital markets but that the benefits for retail investors, businesses and the financial sector will be worth the effort. He welcomed the Baltic initiative to move capital markets forward.

“Political will to move forward is need to achieve real progress on the Capital Markets Union. We conclude that the EU should support Member States actively through its technical assistance and present proposals to underpin its action plan soon. Member States should strengthen regional initiatives, support the Commission's effort on the European level, and improve financial literacy for SMEs as well as the general public. We will continue contributing to on-going discussions through a report on the single market for investment funds, early 2022”, said Rimantas Šadžius, Member of the European Court of Auditors.

The President of the Lithuanian Banking Association stated that the development of the green capital markets was a natural step talking about the evolution of the EU Capital Markets Union.

“Capital markets bring borrowers and lenders together and allow allocating resources to create a healthy national and global economy. They provide essential funding that affects people's lives in many ways, from starting a business to expanding a current one, or providing investment opportunities for those planning their future. Taking the newest trends into account, the development of the green capital markets is a natural next step in the evolution of the EU Capital Markets Union. Banks, currently experiencing the process of a green transformation as well, and capital markets as two spheres of the financial system are rather a duo than opposing alternatives. The development of the one has a positive effect on the other, especially in securitisation as a natural link“, claimed Eivilė Čipkute, President of the Lithuanian Banking Association.

The International Financial Markets Conference is an annual event where business experts, decision makers from Lithuania and abroad share ideas on the newest trends of the financial markets.  Policy-makers and experts discussed the role of the public sector in facilitating economic recovery and fostering capital markets. The conference addressed the most pressing issues and trends affecting the Baltic capital markets. In light of the necessary economic recovery and the demographic developments in the EU, the discussion focused on businesses’ access to finance after the pandemic, and the participation of retail investors in capital markets.