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Europe’s Capital Markets Puzzle

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Europe’s Capital Markets Puzzle


5 min read
3 take-aways
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What's inside?

European efforts toward an integrated capital market appear to be regressing.  

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  • Analytical
  • Overview
  • For Experts


In this incisive report for financial professionals, researchers Karel Lannoo and Apostolos Thomadakis argue that, despite its need for a unified capital market, the European Union’s attempts at integration are proceeding in fits and starts. Reduced retail fund costs, greater market unity and better capital market accessibility for small and large concerns alike are all essential, their scholarly paper makes clear, particularly in the wake of the United Kingdom’s departure from the European Union.


European capital markets lag behind their American counterparts and remain a less attractive source of financing.

Both the US equity and debt markets are twice the size of Europe’s, and crowdfunding and private equity have far less traction in Europe than they do in America. European small and medium-sized entities (SMEs) rarely tap the capital markets, relying instead on bank loans. Risk capital investment in Europe is even further behind, with venture capital limited to start-ups.

The first iteration of the European Capital Markets Union (CMU) plan delivered...

About the Authors

Karel Lannoo is the CEO of the Centre for European Policy Studies (CEPS), where Apostolos Thomadakis is a researcher.

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