French Watchdog Says Regulators’ Focus Is Boosting Investment

(Bloomberg) -- A top French financial watchdog said regulators are increasingly focusing on enabling private investment, rather than creating roadblocks, as Europe seeks to improve its competitiveness and renews its aging infrastructure and defense.

“There’s been this perception for long that, at least in the asset management regulation side, that regulation could only increase in time and never decrease,” Philippe Sourlas, in charge of asset management at Paris-based Autorité des marchés financiers, said at Bloomberg’s Future of Finance event.

“But there has been a major shift roughly one or two years ago, and both at the European and French level, I think regulation has been seen as a new way to create new ways to channel financing to the economy,” Sourlas said on Thursday.

The comments come as France, and Europe more broadly, seek to make its financial industry more attractive and funnel billions in private money to help fund much-needed investments. France on Thursday announced plans to set up a defense fund for retail savers as part of an effort to drum up €5 billion to revive the sector.

Germany has led the way by announcing plans to lift public debt restrictions to unleash hundreds of billions of euros in investment. France is putting more emphasis on private sector involvement because it has far less room for maneuver with a budget deficit already among the highest in Europe.

To help attract more private money, Europe must ensure that its alternative asset managers can compete with the much larger firms in the US, Alexandra Soto, chief operating officer at Lazard Group, said on the same panel.

Thierry Deau, chairman and chief executive officer of infrastructure investment firm Meridiam, said the German plan was creating “wonderful opportunities” also for private markets. He suggested the AMF could do even more to help boost private market involvement, by focusing less on the liquidity of investment products.

“The AMF needs to give up on this obsession with liquidity,” he said. “That has prevented us from doing a lot of things in retail for many, many years.”

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