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Markus Demary / Matthias Diermeier / Heide Haas IW-Policy Paper No. 18 13. July 2015 A Capital Markets Union for Europe: The Relevance of Banks and Markets

The establishment of a Capital Markets Union (CMU) is a high-priority project of the European Commission. CMU should foster additional non-bank sources of finance, mobilize private savings more efficiently and enhance capital market integration.

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The Relevance of Banks and Markets
Markus Demary / Matthias Diermeier / Heide Haas IW-Policy Paper No. 18 13. July 2015

A Capital Markets Union for Europe: The Relevance of Banks and Markets

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German Economic Institute German Economic Institute

The establishment of a Capital Markets Union (CMU) is a high-priority project of the European Commission. CMU should foster additional non-bank sources of finance, mobilize private savings more efficiently and enhance capital market integration.

Although more integration is needed, the Commission‘s proposal misses the role of systemic functions in a CMU. First, banks are important intermediaries specialized in credit relationships and small and medium-sized companies gain from long-term relationships with banks. Second, overcoming financial fragmentation needs sound sovereign debt markets with stable sovereign finances. In a CMU sovereign risks have to be treated adequately in bank regulation. Third, it should be assessed in advance which sources of non-bank finance will be demanded by companies and will become systemic. We recommend an integrated financial supervision for the CMU. Therefore, the European Banking Union should cover all European Union members’ systemic relevant banks. In order to mobilize private savings while coping with the CMU’s complexity, the EU should foster financial literacy.

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The Relevance of Banks and Markets
Markus Demary / Matthias Diermeier / Heide Haas IW-Policy Paper No. 18 13. July 2015

A Capital Markets Union for Europe: The Relevance of Banks and Markets

Download PDF

German Economic Institute German Economic Institute

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How persistent are the current inflationary dynamics and how is monetary policy expected to respond?
Markus Demary / Anna-Lena Herforth / Jonas Zdrzalek IW-Report No. 16 13. April 2022

The new inflationary environment: How persistent are the current inflationary dynamics and how is monetary policy expected to respond?

We argue that the period of low inflation has come to an end based on six structural factors, which define the new inflationary environment.

IW

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Markus Demary / Michael Hüther in Intereconomics External Publication 15. February 2022

How Large Is the Risk of Stagflation in the Eurozone

The rapid recovery of demand combined with supply constraints has led to rising prices during the past months. This is evident in oil and gas markets, but also in international trade, which has been thrown out of step by bottlenecks at Asian ports.

IW

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