LONDON, Oct 9 (Reuters) - The EU must encourage consumers and venture capital companies to make a "massive" push into financial markets after its main financial centre London leaves the bloc in Brexit, the biggest remaining members said in a paper on Wednesday.
No matter what form Brexit takes, it will cause a big shift of financial activity from London to other financial centres in the EU, the paper said. It called for more action to make sure the bloc remains one of the world's two top financial centres, even without London.
"Irrespective of the precise shape of future relations following the Brexit, non-automatic access from London will result in a significant shift of financial services activities to the EU 27 that will be spread across several financial centres," the paper said.
It proposed a rebranding of the bloc's plans to build a capital markets union (CMU), a process that was launched five years ago but has so far seen only patchy progress despite several new laws and a reboot.
The impending departure of Britain, by far the biggest capital market in the bloc, has made the task more pressing. London dominates in derivatives, currencies and pan-European shares, and is expected to compete hard to keep that business even after Brexit.
The paper, published by Germany, France, Italy, Spain, the Netherlands and Poland on the sidelines of meetings of euro zone and EU finance ministers in Luxembourg, called for the CMU to be renamed the "Savings and Sustainable Investment Union", to win more support from a public wary of speculative markets.
It proposes a "priority shift" to help consumers turn savings into investments, and ensure that the EU remains "one of the top two financial centres of the world" after Brexit.
The focus for "massively" developing equity markets should be on venture capital and private equity, and creating a non-profit "consolidated tape" that links all trading platforms to make share trading cheaper.
There is also a need to develop debt, credit and foreign exchange financing tools - core strengths of London's financial centre - in a manner that "increases the international funding currency role of the euro", the paper said.
There is already a battle between UK and EU regulators over where euro-denominated shares can be traded by investors for the bloc after Brexit.
A push to deepen EU equity markets could mean Britain's market players encounter obstacles when trying to gain access to EU investors after Brexit. Many London-based banks, insurers and asset managers have opened new EU hubs to cope with Brexit. (Reporting by Huw Jones Editing by Peter Graff)