European Financials: Can Europe build financial champions?

Research evidence excerpt

European Financials: Can Europe build financial champions?

Barclays | European Financials

Executive summary

Grace Dargan Barclays, UK | Krystal Han Barclays, UK | Michael Sanderson Barclays, UK |

Claudia Gaspari Barclays, UK | Flora Bocahut BBI, Paris | Paola Sabbione BBI, Milan |

Cecilia Romero Reyes Barclays, UK

The Savings and Investment Union ('SIU') is Europe's framework to drive economic growth

and address an investment gap of €750–800bn per year, supported by better deployment of

household wealth and improving the competitiveness of European financials on a global stage

through a more integrated and efficient financial system.

But there is a long road ahead before Europe sees the benefits. European legislative changes

require multiple rounds of consultation and review, and as such many of the key SIU packages

aren't due to be fully implemented until 2028 or beyond (see 3. The SIU roadmap below). In our

view, this is only phase 1 of the journey; phase 2 will be whether these reforms can drive the

intended shift in financial behaviour (whether that be household savings culture, deeper equity

markets etc). As such, it will take time for the SIU to achieve its objectives and for the benefits to

take effect.

There is broad support for the objectives of the SIU, but in practice a number of challenges

remain. The SIU is a vast, interconnected framework of policies and strategic reviews for

different areas of financial markets. Given the complexity, long-dated pay-offs and dependence

on behavioural change, we see execution risk as high with many regulatory and legislative

hurdles to overcome. This is before considering the political backdrop; generally the largest

countries with pan-European financials are the biggest advocates for the SIU, such as France,