Ireland has the potential to benefit strongly from a Capital Markets Union (CMU), financial services Commissioner Jonathan Hill said yesterday.
Commissioner Hill told the Institute of International and European Affairs (IIEA) that small businesses in particular could gain from access to funds other than from the banks.
The aim of CMU, a core plank of Brussels' jobs and growth agenda, is to tear down barriers that make it cumbersome and expensive for companies to tap investors for cash.
Unlike in the US, where companies rely mainly on shares or bonds to raise money, in Europe small and medium-sized firms primarily borrow from their own countries' banks.
"Ireland has the potential to benefit strongly from the Capital Markets Union," Mr Hill said. "I think that your SMEs would benefit from greater access to a variety of sources of capital alongside bank lending and your strong fund industry would benefit from a wider pool of potential investors across the EU."
A public consultation on the CMU plans ended just last month and Mr Hill is due to respond in September on what will be his priority measures.
He said there had been a groundswell of support from right across Europe.
He said three themes had been identified as being at the heart of the project.
These include how the CMU can increase funding options for businesses, how it can create more opprotunities for investors and how it can encourage cross-border investment.
Earlier, at the annual conference of the Federation of International Banks in Ireland (FIBI), Mr Hill noted that there are 35,000 people directly employed in the financial services sector in Ireland.
He claimed the CMU can help the Government achieve its objective of boosting employment in the sector here by 10,000.
Junior Finance Minister Simon Harris, who has responsibility for financial services, said from an Irish perspective, CMU could significantly increase issuer and investor access to more liquid European markets and, in so doing, enable companies here to expand and create employment.
"I believe that the financial services sector in Ireland faces and will continue to face challenges," he said. "There are local, national and global competitive challenges which we must and will face.
"We have a strong competitive position but we cannot afford to stand still. The IFS strategy is part of the process of remaining competitive now and in the future."