Bank of Lithuania
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The FinTech sector may give further impetus to the EU Capital Markets Union as well as generate new opportunities for economic growth in Member States, claims Vitas Vasiliauskas, Chairman of the Bank of Lithuania, who chairs a debate on the development and prospects of the Baltic, Central and Eastern European capital markets, held on 13 September at the EUROFI Financial Forum in Tallinn.

‘Development of innovative financial instruments would reinforce capital markets in regions, where potential of these markets has not been fully exploited, including the Baltic States as well as Central and Eastern European countries. This would also reduce the dependence of these economies on bank financing,’ said V. Vasiliauskas.

The Chairman of the Bank of Lithuania points out that Lithuania is now encouraging the FinTech sector to take advantage of its favourable regulatory arrangements and strengthen competitive edge on EU and global level.

‘Against the backdrop of Brexit negotiations, FinTech allows Lithuania to compete in attracting international financial companies leaving the UK. The rapidly expanding FinTech sector in Lithuania brings us distinct advantages – a favourable regulatory regime may help our country to make its mark on the highly-potential FinTech map,’ said V. Vasiliauskas.

Discussing the development of the EU Capital Markets Union, the Chairman of the Bank of Lithuania emphasises its importance for Lithuania and other countries in the region whose economies are excessively reliant on bank lending. Developed capital markets would enhance the resilience of the financial sector, allowing small and medium-sized enterprises to use more diverse financing sources. Currently, small and medium-sized businesses are still facing challenges when seeking a bank loan.

‘Despite the importance of the EU Capital Markets Union, we must admit that its implementation has not been as quick as expected. It is clear that a lasting breakthrough requires stronger stimulus at a national level. Yet we must also prevent the creation of contrasting and incompatible regulatory regimes for capital markets within the EU,’ claimed V. Vasiliauskas.

According to him, this is especially relevant in such innovation-driven areas as FinTech. Hence if we were to eventually establish common EU-wide FinTech regulation, we should first of all foster development and growth in this sector at a national level. This would allow distinguishing the best regulatory practices that could serve as a basis for constructing EU-level measures for containing relevant risks as well as preventing regulatory arbitration.

Crowdfunding is one of the good examples of national regulatory practice, which could be the starting point for further discussions on pan-European regulatory arrangements.