World's biggest sovereign wealth fund says EU markets need single regulator

CNBC

09-06-2025

The world's largest sovereign wealth fund will this week tell the European Union that "better and simpler regulation" is key to the markets reforms it urgently needs.
"European markets over time have fallen behind in terms of business dynamism and the provision of new investment opportunities to institutional investors," Norges Bank Investment Management, the largest single-owned investor in EU capital markets, said in a letter addressed to the European Commission to be sent Tuesday.
The letter comes as part of an EU consultation on the establishment of a Saving and Investments Union framework to streamline the bloc's financial systems. The EU has for more than a decade been debating and inching toward the creation of a Capital Markets Union to boost investment and saving flows across the region.
NBIM, the manager of Norway's huge oil and gas revenues, had 285 billion euros ($325 billion) in securities issued by EU member states and European corporates at the end of 2024. The fund's total value was around $1.9 trillion in 2024, according to its annual report, with 71% of its assets in equities and 26.6% in fixed income.
A key recommendation is that "capital markets supervision should be unified at a European level," it said in the letter. The EU lacks a single security market regulator or rulebook covering all trading and this leads to legal uncertainty, operational complexity, long processes and inconsistent interpretations, it continued.
The EU must meanwhile address regional fragmentation in securities law, corporate law, insolvency and tax regimes, and standardize pan-European debt issuance process, it said.
"European capital markets can become more dynamic, efficient, and better positioned to facilitate future economic growth with policies that enhance the supply of productive investment opportunities and increase the demand for high-yielding investments," NBIM said.
Sentiment toward European markets among global investors has undergone a notable shift over the last six months, buoyed by political turmoil in the U.S. and expectations for regulatory reform and higher fiscal spending in the EU. "Europe is growing up and taking control of its own destiny, which can be positive for macro trends," Blair Jacobson, co-president of private equity firm Ares Management, told a conference last week, noting that there was more of a pull factor into Europe than a push factor out of the U.S.