The suggested reforms are intended to overcome the obstacles to raising risk capital and debt capital, particularly for small and medium-sized enterprises; they may also help to support asset diversification by institutional investors. The finance ministers have asked the Commission to submit a detailed plan of action by the end of September of this year.
In the short term, the priorities are to simplify the prospectus directive, making it easier for firms, especially small and medium-sized ones, to obtain listing; to standardize information on credit quality; to develop a market for simple and transparent securitizations, possibly subject to favourable prudential treatment; and to create a European private placement market, a form of financing that allows firms to place their bonds with one or more institutional investors at a lower cost than that of issuing securities to the public.