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Daring Long-Term : Proposals to Reform Investment for Tomorrow's Europe

Gérard de la Martinière Rapporteur de la Task Force ILT, Place de Paris. Contact : Francois.Calonne@caissedesdepots.fr.


The EU is experiencing a paradox : ten years since the eruption of the financial crisis, growth has finally returned but long-term investment (LTI), is yet to reach pre-crisis levels. However, the challenges facing the EU require an unprecedented long-term investment effort. The financial stability, priority of the post-crisis reforms, and a prerequisite to an upturn in long-term financing, is not sufficient alone – as demonstrated by the persistent weakness of LTI in Europe. The reforms adopted in the name of stability also tended to penalize LTI. The « quick fixes » introduced to rectify the undesirable effects of the reforms were ultimately of limited impact and sometimes even inappropriate. We are therefore proposing a simple yet comprehensive definition of what LTI essentially means. "Long-term investment is the financial investment strategy deployed by any operator holding stable resources which at the same time allows for and requires asset allocation able to generate an economic return over time."

On this basis a favorable regulatory environment could be created according to four main principles : a) reposition LTI at the heart of public policy, b) enable effective quantification of long-term risks and returns, c) promote long-term asset & liabilities management and d) promote the alignment of interests among the various operators around long-term objectives.


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Footnotes

1   Association nationale des sociétés par actions (ANSA), France Invest (ex-AFIC), Association française des investisseurs institutionnels (AF2i), Association française des entreprises privées (AFEP), Association française de gestion financière (AFG), Bpifrance, Centre des professions financières (CPF), Fédération française de l'assurance (FFA), Fédération nationale des travaux publics (FNTP), Forum de l'investissement responsable (FIR), Mouvement des entreprises de France (MEDEF), Paris Europlace.

2   Propositions de règlement adoptées depuis, voir : (UE) 2017/2402 et règlement (UE) 2017/2401.

3   Directive (UE) 2017/828 du Parlement européen et du Conseil du 17 mai 2017 modifiant la directive 2007/36/CE en vue de promouvoir l'engagement à long terme des actionnaires.

4   Voir sur le site : https://www.caissedesdepots.fr/sites/default/files/medias/fr_-_rapport_lti.pdf.


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