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Financial Instruments: the regulatory framework

Financial Instruments: the regulatory framework. Antoine Quero, DG Budget (European Commission) "New financial instruments and the role of national promotional banks for the benefit of European SMEs" Public Hearing - European Parliament, BUDG Committee Brussels, 26 April 2016.

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Financial Instruments: the regulatory framework

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  1. Financial Instruments: the regulatory framework Antoine Quero, DG Budget (European Commission) "New financial instruments and the role of national promotional banks for the benefit of European SMEs" Public Hearing - European Parliament, BUDG Committee Brussels, 26 April 2016

  2. Principles underpinning the regulatory framework of EU financial instruments: • Flexibility to ensurereactivity and compatibility withmarket conditions. • Accountability to verify pertinence regularly.

  3. How is flexibility achieved? • Basic rules established in the Financial Regulation (arts. 139-140). • Generic authorization to use financial instruments in the basic acts (Horizon 2020, COSME, CEF…). • Detailed design left to the Commission.

  4. How is accountability achieved? • Objective performance indicators (e.g. leverage, market demand). • Detailed reporting obligations (art. 140.8 FR). • Continuity conditional to performance (art. 140.9 FR).

  5. Implementation modes: • Both direct and indirect management are possible (art. 139.4 FR). • Indirect management: by entrusting tasks to eligible entities (e.g. EIB, NPBs… art. 58.1.c FR)

  6. Strengths of the regulatory framework: • Balanced set of rules: market compatibility vs. public accountability. • Transparency. • Implementation rests on public financial institutions.

  7. Challenges: • Raise financial expertise on the design side (Commission, managing authorities) and the control side (EP, Council). • Increase ex-ante assessment capability. • Widen delivery channels.

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