LONDON (Reuters) - The European Commission will announce new initiatives to reconfigure its capital markets union (CMU) project on June 7 to reflect Britain’s decision to leave the bloc, a senior commission official said on Thursday.

FILE PHOTO: An European Union (EU) flag is seen blowing in the wind in front of the city's regional state administration headquarters in central Kiev, Ukraine, May 11, 2017. REUTERS/Valentyn Ogirenko

Confirming a Reuters story published on Wednesday, Ugo Bassi, a director in the European Union executive’s financial services unit, said the CMU needed reassessing because of Brexit.

“We are preparing now the action plan for CMU 2.0 which will be published on June 7 in the form of a mid-term review and which will announce a number of additional initiatives we would like to take in coming months,” Bassi told a conference organized by the Association for Financial Markets in Europe.

“We can no longer count on liquidity pools in London.”

Initiatives will include making it easier to sell funds across borders using a so-called EU passport.

Stronger European Union supervisory powers, probably for the bloc’s European Securities and Markets Authority, were also needed to reinforce CMU, he said.

“We should move slowly and firmly towards centralized supervision,” Bassi said.

The departure of Britain, the EU’s biggest financial market, had raised questions about whether CMU was dead in the water but Bassi said it remained a flagship project.

He said Brexit meant there was an even stronger case for CMU though the approach needed to change slightly: “We are going to develop a new agenda.”

Reuters reported on Wednesday that a “deep re-engineering” of CMU next month seeks a more “autonomous” capital market in an EU of 27 countries, raising concerns over access to the bloc’s market.

LONDON ALTERNATIVE

The CMU is now about an alternative financial center that will be able to service the needs of the EU27, Simon Puleston Jones, head of Europe at the Futures Industry Association, told the AFME conference.

“The biggest risk is the EU27 looks in on itself, reboots CMU with a vision of creating one or more financial centers in Europe, basically competes toe-to-toe with London and New York, and it turns out that was not possible,” Puleston Jones said.

“The worst impact of Brexit is that something that was functioning pretty well in an EU of 28 and significantly falters,” he added.

Bassi said CMU has a global perspective in mind.

EU had tried to accelerate CMU after several early initiatives unveiled in 2015 became bogged down, casting doubt that the project’s “building blocks” would be in place by 2019.

A push to revive securitization, a type of debt security that can raise funds for companies, remains stalled.

Bassi said securitization reform was “lagging behind a little bit too much”, and the commission is having “hard” discussions with member states and the European Parliament to get agreement.