Introduction

Following the recommendations of the 2024 Draghi and Letta reports, European Commission President Ursula von der Leyen has made the integration of the financial system a key priority for her second mandate. She reiterated this objective in the 'competitiveness compass' of 28 January 2025. The compass sets out that the savings and investment union (SIU) strategy aims to 'create new savings and investment products, provide incentives for risk capital, and ensure investments flow seamlessly across the EU'. The Draghi report estimates that the EU must mobilise at least €750-800 billion in additional annual investment to meet the objectives laid out in the report. Therefore, the SIU aims to leverage private financing to strengthen EU competitiveness.¹

Enhancing the integration of the EU's financial system is an ongoing policy action. Although the free flow of capital is one of the four fundamental freedoms of the EU single market, 'technical' barriers to the cross-border movement of capital persist.² The banking crisis of 2007-2008 shed light on the dramatic consequences these barriers could have and prompted the EU to accelerate the integration of its banking system, beginning with its first communication regarding this issue in 2012.

The Commission later launched – in 2015 and 2020 – two action plans for the capital markets union (CMU), primarily aimed at 'de-fragmenting' the non-bank financial system. Despite significant legislative progress achieved through these plans, the Letta report highlights that the integration of capital markets requires further efforts. Indeed, although incomplete, the banking union is considered well advanced, while other segments of the financial system require urgent policy action to deepen integration and ensure private financing of EU priorities.

It is in this context that the Commission presented, on 19 March 2025, the savings and investment strategy (SIU), which builds on and integrates the ongoing measures of the CMU and the banking union into a single strategy for the integration of the EU financial system.

The savings and investments union

The full title of the strategy is 'Savings and investments union: A strategy to foster citizens' wealth and economic competitiveness in the EU', reflecting the understanding that EU citizens and businesses are at the heart of the strategy's objectives. The strategy builds on the objective of expanding financing opportunities for businesses, especially in securities markets. It also places emphasis on the 'demand side' of the financial markets, specifically the demand from households – known as 'retail investors', as opposed to wholesale financial institutions. A large majority of retail investors have limited time, financing capacities or willingness to gain investment skills and information. Their trading volumes are relatively low, resulting in proportionately higher costs. Consequently, they tend to store their savings in easily understandable saving instruments like bank deposits, which are relatively accessible, transparent and guaranteed by national deposit insurance schemes.³

The SIU is built on four 'strands of work' (see Figure 1). The objective of the first strand, named 'Citizens and savings', is to increase the volumes of savings channelled towards the real economy, bypassing secured bank deposits. This strand will primarily consist in widening the range of options for financing firms through non-bank financial institutions, especially pension funds and insurance companies. Households save for their future, and the time horizon better matches these institutions, which can then optimise the investments. This first strand thus supports the 'demand side' for financial instruments.

The objectives of the second strand, named 'Investments and financing', are to increase the financing options available to businesses in order to grow, innovate and create jobs. This strand will primarily focus on creating new financing instruments to support innovative firms in their (rapid) development phase – also known as 'scale-up' companies. This second strand thus supports the 'supply side' of financial instruments.

The objective of the third strand, named 'Integration and scale', is to 'de-fragment' the EU capital markets to create a financial environment where capital flows freely across Member States. This would enhance a level playing field among competing firms, broaden funding access to successful firms, while at the same time providing citizens with more diverse and balanced savings options.

The objective of the fourth strand, named 'Efficient supervision in the single market', is to ensure consistent supervisory treatment across Member States. Uniform supervision is a key factor for maintaining a level playing field in the EU. Single supervision has already been implemented within the banking union framework (pillar 1).

Legacy from previous action plans

Although the SIU primarily builds on the CMU, it also includes the integration of the banking system. Within the legislative area focused on banking, there are two major files. The first is a package proposal for the crisis management and deposit insurance (CMDI ⁴) for banks, aimed at ensuring that a bank's failure is resolved by private financiers, also known as 'bail-in.'⁵ Negotiations on this were finalised on 23 June 2025.

The second file, which is still ongoing, is the long-standing European Deposit Insurance Scheme (EDIS ⁶), now incorporated into the SIU. The EDIS proposal was introduced in 2015 and is the final pillar of the banking union, yet to be achieved. In 2024, the European Parliament Committee on Economic and Monetary Affairs (ECON), which had been assigned the file within Parliament, adopted a mandate report suggesting that the first of the three implementing phases – the co-insurance phase – be implemented now, with additional proposals to follow from the Commission. However, this report has not been presented in plenary, and the Council has not reached an agreement on a mandate.

An important ongoing initiative in the 2020 CMU action plan is the retail investment package. The objective is to increase the participation of retail investors in financing the real economy. To achieve this goal, the package sets out as its primary objective to enhance trust and confidence among retail investors towards the markets. It includes measures to clarify information for retail investors. The package is currently in the negotiation phase.

Policy actions

The strategy includes a list of policy actions pertaining to the various work strands (Table 1). Some actions are legislative, while others are non-legislative, with more details available in the appendix to the communication. A major area of policy action in the Citizens and savings work strand involves creating new savings instruments for households, which would provide them with incentives to invest in long-term investment vehicles rather than bank deposits. Proposed actions include establishing savings and investment accounts (see box below) and promoting supplementary pension plans. While not new, this issue has been specifically emphasised, and the approach applied appears to be different compared to previous action plans on savings and pensions. Previous plans, such as the pan-European pension plan (PEEP), focused on the cross-border dimension, whereas this time domestic solutions are likely to be encouraged and monitored.⁷

The investments and financing work strand aims to enhance the supply of securities by businesses and stimulate equity investments by financial institutions. This includes the proposal to amend the securitisation framework published by the Commission in June 2025, which is currently being reviewed by the co-legislators. The Commission will also review the Solvency II delegated act provisions on the regulatory treatment of equity investments of insurance companies. Additionally, the Commission will provide guidance on prudential treatment for banks.

The third work strand is primarily concerned with the securities markets and their segmentation. The package of legislative proposals on market infrastructure is likely to be one of the most ambitious reforms of the SIU. The communication announced that it would address central securities depositories, financial collateral, settlement and trading market structure. The primary objective of the package is to reduce cross-border trading hurdles and adapt EU law to new technologies and financial developments.

The fourth work strand is entirely dedicated to strengthening supervisory convergence tools for national competent authorities and European supervisory authorities (ESAs). This strand proposes that ESAs could be given direct supervisory powers in limited areas if necessary. In a speech at the Eurofi Forum on 17 September 2025, Commissioner Maria Luís Albuquerque hinted at possible centralised supervision of certain market infrastructures, such as central counterparties, central securities depositories and trading venues.⁸

European Parliament position

Parliament has consistently advocated for the integration of EU financial services. In its report on Investments and reforms for European competitiveness and the creation of a CMU of 10 September 2025, Parliament endorses the integration of the EU internal market and proposes measures to mobilise private investment and improve access to finance through a unified EU capital market. Key priorities include improving access to venture capital and equity financing, especially for innovative companies. These companies would also benefit from uniform EU-wide tax rules and further alignment of regulatory frameworks to reduce fragmentation. Parliament invites the Commission to assess the potential of a '28th regime'.

Channelling household savings into productive investment is important, and to achieve this, Parliament suggests introducing an EU investment savings account or a straightforward EU label for basic investment products. Additionally, pension funds and insurance companies are viewed as essential intermediaries, with Parliament urging the Commission to adopt an 'ambitious' delegated act on long-term guarantees and equities under the directive providing the regulatory framework for insurance companies – known as Solvency II.

Regarding securities markets, Parliament stresses the importance of competitive post-trading infrastructures, endorsing a review of the legal framework while noting that any consolidation should be market-driven. Parliament also backs initiatives to facilitate intermittent trading of privately held shares, thereby providing new equity issuance options for privately held companies.

Harmonising supervision is another key priority. Parliament endorses granting the European Securities and Markets Authority (ESMA) – the EU's financial markets regulator and supervisor – enhanced convergence tools and possibly direct supervisory authority over EU market infrastructures. However, Parliament also supports the Commission's proposal to introduce measures that 'strengthen supervisory convergence instruments to enhance their effectiveness', emphasising that increased powers must come with greater accountability and governance reform.

Finally, Parliament reaffirms its commitment to the EU's sustainable finance framework, underlining the mobilisation of both public and private investment for the green and digital transitions.

In the previous legislature, Parliament adopted a resolution on the further development of the CMU in September 2020, prioritising five areas for action. The promotion of long-term and cross-border investment was identified as the first priority, under which national insolvency proceedings should be made more efficient and effective, and corporate governance rules should become further harmonised. Supervision of markets would benefit from efficient and effective cooperation between national competent authorities and ESAs to promote convergence. ESMA could gradually assume direct supervisory powers in some areas where this would deliver gains in efficiency. Parliament also calls for a wider range of 'suitable investment options' for retail investors, encouraging greater participation in capital markets involvement through appropriate products, including pension products. Finally, financial education is essential to achieve these objectives.

Council position

In May 2024, the Council adopted conclusions on the future of the single market, calling for a comprehensive new strategy for the single market with a focus on improving its regulatory environment to foster joint public and private strategic investment.

In a statement on the future of the CMU of 11 March 2024, the Eurogroup in an inclusive format identified on three priority areas for action: architecture, business and citizens. The architecture should be strengthened through the development of securitisation markets, supervisory convergence and reduced regulatory costs. Businesses should gain improved access to private funding to 'invest, innovate and grow in the EU'. Finally, citizens should enjoy better opportunities to accumulate wealth and improve their financial security. Sufficient complementary income streams for an ageing population should be encouraged through longer-term savings and investment products, including pension schemes. As regards supervision, the Eurogroup invites the Commission to examine options to 'enhance supervisory convergence through a more efficient and effective use of the existing powers of the European Supervisory Authorities and a possible targeted strengthening of their role and governance arrangements'.

In a statement on the competitiveness of the European economy of 4 November 2024, the Eurogroup in an inclusive format reiterated that reducing fragmentation and regulatory barriers in access to finance remains crucial. At a time of limited public finance capacities, private investment is the primary source to finance EU needs for green and digital transitions, defence, and innovation development. Therefore, deepening financial market integration is urgent. In this context, public funds should act as catalysts to attract private capital, and the EIB and EU-level financing should support projects delivering shared public goods.

The Eurogroup has reiterated its support for the integration of the financial system on several occasions. At the Euro Summit held in December 2021, the Eurogroup called for the acceleration of the deepening of the CMU, and in March 2023 it emphasised the role that a strong financial architecture would play in attracting sustained investment, supporting innovation and the creation of jobs, and accelerating the green and digital transitions.

Other views

National authorities, stakeholders and think tanks

On 17 September 2025, the French Markets Authority (Autorité des Marchés Financiers, AMF) called for enhancing the powers of the ESMA similarly to the single supervisory mechanism in the banking sector. The AMF argues that supervisory fragmentation is a major hurdle to capital markets de-fragmentation. It is urgent to ensure consistency in supervisory practices and exercise direct supervision over large, cross-border entities, such as pan-European market infrastructures, global crypto-asset service providers and large asset management groups.⁹

A policy paper published in February 2025 by the German stock exchange market (Deutsche Börse) recommends 10 steps to establishing the SIU. Measures range from harmonising equity markets listing requirements and establishing a 'true' prospectus passport regime, to tax incentives for a 'cultural change' in private pensions and employee's participation. Deutsche Börse supports the creation of EU savings and investment products, amending the PEPP to a regime similar to the United States' 401k plan, and establishing EU equity funds. In a statement in July 2025, Euronext – the largest EU capital markets infrastructure – stated that it was also in favour of a 'single rulebook, single supervision, integrated post-trade systems and enhanced access to liquidity'.

In a July 2024 report on the EU's looming investment crisis, Finance Watch regrets that the EU has shown self-restraint in terms of debt with the adoption of economic governance. They highlight that, even if fully integrated, capital markets are unlikely to meet investment needs, suggesting they would only finance a third of the necessary funds. In a statement from March 2025, the European Trade Union Federation (ETUC) reiterates that common debt would be a far more effective tool in achieving the EU's objectives, rather than deepening the SIU. The SIU is unlikely to provide additional funding. ETUC is also concerned that one of the main proposals for the SIU is to revive securitisation as a means to deepen capital markets and reduce dependency on banks. While securitisation would increase risks, the benefits in terms of investment gains are questionable.

In an occasional paper published by the ECB in May 2025, the authors make five recommendations regarding the SIU. Firstly, they suggest that facilitating access to capital is necessary through a new standardised framework for a European savings and investment product. Secondly, they argue that further integration of the 'supervisory ecosystem' and post-trading infrastructure, as well as the revival of securitisation markets, would promote cross-border capital markets. Thirdly, they suggest that increasing opportunities for equity and venture capital financing should be a priority in order to channel capital towards innovative and competitive firms. Lastly, they point to the need for longer-term initiatives that address barriers resulting from the lack of harmonisation in insolvency, corporate and taxation regimes. These initiatives include designing a safe asset for the EU, completing the banking union and promoting financial literacy and inclusion.

In a June 2025 report , the International Monetary Fund (IMF) warns that an integrated EU capital market alone cannot attract substantial investment unless accompanied by regulatory reforms – reforms that still lack sufficient support among policymakers and market players, as the incomplete EU banking union illustrates. The report argues that this incomplete banking union remains a major obstacle to the SIU, with the current SIU strategy 'unquestionably holding back progress toward a pan-European capital market'. More pessimistically, the authors argue that even if progress were complete, the SIU is unlikely to generate enough investment, higher rates of return would still be needed. Therefore, competitiveness and the single market are also key.

In a June 2025 newsletter¹⁰ of, the think-tank Bruegel strongly supports the integration of capital market supervision. The author of the letter argues that the current system is 'inefficient and unduly complex'. The suggested reform would consist in establishing a 'multicentric' ESMA that would operate primarily through its own offices in EU countries, ensuring supervisory consistency and no preferential treatment for any single financial centre.

The Centre for European Policy Studies (CEPS)¹¹ argues that the fundamental issue for EU capital markets is their limited depth rather than integration alone. This limitation hinders the ability to finance illiquid investments for which banks' business models are not suited. Therefore, according to CEPS, similar to the CMU, the core objective of the SIU should be to 'strengthen EU capital markets'. This strengthening will help to 'finance innovation, boost productivity and support growth'. CEPS suggests that the key policy action should focus on long-term savings and investment product. This approach should draw from the experience of the retail investment strategy legislative process. Other key actions include modernising the EU's market settlement infrastructure and making progress in resolving failing banks. Ideally, the SIU should represent a 'transformational leap' – not a mere change – where capital markets expand independently alongside a robust banking sector, channelling financing towards 'high-impact investments'.