Summary of Are Euro-Area Corporate Bond Markets Irrelevant?

The Effect of Bond Market Access on Investment

Federal Reserve Board,

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Are Euro-Area Corporate Bond Markets Irrelevant? summary
Corporate capital market access has different ramifications for American firms than for European firms.


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Economists Bastian von Beschwitz and Conor T. Howells explore the relationship between capital market access and overall investment for firms in the United States and the European Union. While US firms regularly issue bonds, EU companies rely more on bank credit. But does the lack of a large corporate bond market put EU firms at a disadvantage in terms of their potential growth? getAbstract recommends this timely though esoteric report to those looking to understand the dynamics of the US and EU capital markets.

In this summary, you will learn

  • How American and European companies access capital,
  • What bond ratings mean for firms in the United States and the European Union, and
  • What implications expanded bond markets might have for companies in the EU.


In the United States, companies turn largely to the capital markets – specifically, bond issuance – for investment capital, raising more than twice as much via bonds than through equities in 2015. In contrast, companies in the European Union are much less reliant on bonds for financing. As a percentage...
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About the Authors

Bastian von Beschwitz is an economist at the Board of Governors of the Federal Reserve System, where Conor T. Howells was a senior research assistant.

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