German MEP expresses concerns over concentration in ETF market

Europe
On the 02/06/20 at 3:11PM

by

Adrien Paredes-Vanheule

Sven Giegold, member of the commission of economic and monetary affairs at the European parliament, spoke as panelist of the 2020 Politico Finance Summit, co-organised on 6 February in Paris by Politico and L'Agefi.
Sven Giegold, German MEP
(Dominik Butzmann)

Speaking on a panel dedicated to getting the right priorities in the European financial industry and to achievements of the European commission in that regard, the German member of the European parliament declared that he was worried about the concentration phenomenon in the ETF market.

"European savers must have greater access to ETFs because of their low cost but the ETF market is concentrated in a few hands of foreign asset managers having very little responsibility in Europe. This is an important issue for the European competition policy and regulators," said Giegold. The MEP was later joined by Polish peer Marek Belka, who argued in another panel, that if ETFs form an attractive instrument for European savers, they also have the power to "kill stock exchanges".

Both Vanessa Casano, head of asset management policy division at French financial watchdog AMF, and Steven Maijoor, chair of Esma, also took up the topic. The former, replying to Giegold, recalled that ETFs was a low margin business and that it would only suit large-scale platforms, thus suggesting that ETFs would not be a one-size-fits-all model for asset managers. The latter, who was highlighting the expensive cost of active investment funds in Europe, stressed that retail investors were more invested into active funds than professional investors and this, in his opinion, does not make any sense.

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