Summary of Making a Reality of Europe’s Capital Markets Union

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Financial stakeholders depend on robust capital markets in the United States; however, in the European Union, a capital markets infrastructure is far less developed. Economists André Sapir, Nicolas Véron and Guntram B. Wolff examine the development of the EU’s Capital Markets Union Agenda and its plan to strengthen the framework and operation of a unified EU capital market. getAbstract recommends this highly detailed but informative report to policy experts and financial executives interested in a deep dive into the policy direction of EU leadership.

In this summary, you will learn

  • How much progress Europe is making toward creating a Capital Markets Union (CMU),
  • Why the CMU is important to the euro zone’s economic stability, and
  • What role the European Securities and Markets Authority must play.
 

About the Authors

André Sapir and Nicolas Véron are senior fellows at Bruegel, where Guntram B. Wolff is the director.

 

Summary

In 2014, European Union leaders looked at the economic wreckage from the global financial and subsequent EU sovereign debt crises as an alarm to strengthen the continent’s capital markets architecture. EU nations still depend, in large part, on banks as suppliers of liquidity and financing. As policy makers learned, however, such major exposure to only one channel of funding can foster problems and financial instability. While EU officials conducted substantive work on developing a more sophisticated and connected banking platform via Economic and Monetary Union, comparatively little movement on a capital markets initiative followed. Because of the national diversity within the EU and the plethora of governance jurisdictions, leaders always faced difficulties in improving the cohesion and workability of an EU capital markets system. Despite little traction, the Capital Markets Union (CMU) Agenda took shape in 2014. 


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