European Council backs measures to boost cross-border capital flows

The Council of the European Union has agreed on key proposals by the European Commission to strengthen EU capital markets and boost cross-border financial firms’ global competitiveness.

The Market Integration and Supervision Package (MISP) was published on 4 December 2025 and seeks to enhance EU-level supervision and reduce barriers for trading operators in the EU.

As the centrepiece of the EU’s savings and investments union (SIU), the package aims to make it easier for capital to flow across borders and help mobilise private investment in EU businesses. MISP was introduced in response to statistics showing an estimated €10trn of household savings are currently held in the EU in low-yield bank deposits rather than being invested in capital markets.

Simon Harris, Tánaiste and Minister of Finance of Ireland, said: “Europe has the savings. Now it’s time to put them to work. [This] agreement is a major step forward for a deepened savings and investments union, with significant added value for the EU’s longer-term competitiveness.

“This package will help to unlock the full potential of the single market for financial services, allowing EU citizens and businesses alike to tap into well-integrated and more efficient capital markets.”

Under the Council’s agreed position, supervision of the most significant cross-border trading venues, as well as the most significant post-trading entities such as central securities depositories (CSDs), and central counterparties (CCPs), would be transferred from national authorities to the European securities and markets authority (ESMA).

This will provide more consistent oversight of the market operators considered most important to the EU’s economy, while increasing market confidence, the Council said.

MISP also introduces a suite of measures to reduce cross-border barriers and complexity for asset managers operating in the EU to increase legal certainty, decrease compliance costs and improve the sector’s market access.

It includes an optional depositary passport regime whereby asset funds may appoint a depositary in a different EU member state to where they are established, to increase competition help build a more integrated European asset management market.