Given the perceived advantages of an increase in risk capital provision, and also recognising the challenges for economic operators in undertaking risk capital as an activity, public authorities have sought to take measures to promote risk capital markets. The Commission has identified several measures, in particular in the RCAP, which should be taken to encourage the growth of risk capital markets. These include:
(a) promoting a culture of entrepreneurship;
(b) easing fiscal constraints on equity, such as less favourable treatment than that given to debt financing;
(c) measures to foster market integration;
(d) easing regulatory constraints, including limitations on investments by certain types of financial institutions (e.g. pension funds) and administrative procedures for setting up companies.
