Villeroy: calls for genuine EU supervision of investment funds

Francois Villeroy de Galhau, Bank of France governor and ECB policymaker, has emphasized the need for a unified European supervisory framework for investment funds as a critical step toward strengthening the EU's financial integration and economic sovereignty. Speaking at a conference in Luxembourg, Villeroy highlighted that fragmented capital markets and insufficient domestic investment are undermining Europe's competitiveness, particularly in innovation and venture capital. He argued that a "genuine European supervisory framework" for investment funds would accelerate the scaling of pan-European capital pools, enabling more efficient allocation of savings to support corporate growth and technological advancement according to the Bank of France.

This proposal is part of a broader strategy outlined in the Bank of France governor's speech, which calls for urgent action to complete the Single Market and establish a Savings and Investments Union (SIU). Villeroy cited stark disparities between the eurozone and the U.S., noting that European non-financial corporations secure only 85% of GDP in equity financing compared to 220% in the U.S. as reported. To address this, he proposed five levers, including harmonizing investment fund regulations, creating a streamlined EU business law regime, expanding retirement savings vehicles, and fostering public-private partnerships.

Villeroy also stressed the importance of setting clear deadlines for implementation, referencing the 1993 Single Market deadline as a model. He urged policymakers to adopt a "mobilizing" target—such as 2028—to ensure progress on financial integration and the development of European safe assets. Without swift action, he warned, Europe risks losing its window of opportunity to enhance the euro's global role and secure economic resilience amid rising geopolitical and technological challenges according to the Bank of France.