Strengthening and integrating EU's capital markets through cross-border and regional initiatives

for the Baltic States: Estonia, Latvia and Lithuania

The Commission supported national authorities in their efforts to improve regional capital markets in the Baltic States with the introduction of a regional covered bond framework.

Context

Ministries from different EU Member States sought to strengthen and integrate their capital markets through cross-border and regional initiatives. This initiative helped build regional investment capacity.

Support delivered

Together with the EBRD, the Commission supported the Member States with measures to assist in the introduction of a pan-Baltic covered bond framework.

The support measures consisted of:

• reviewing the existing financial sector legislation to identify issues that may hinder the development of a securitisation and covered bond market; 
• proposing new legislation to provide a legal basis for covered bonds and securitisation instruments.

Expected results

The Commission support delivered the following results:

• contribute towards well-functioning and larger capital markets in the region;
• opening up the long-term funding options for banks, allowing them to increase lending to regional economies; 
• increasing the resilience and competitiveness of the Baltic economies in the region enabling them to face external shocks.