1. Home
  2. Studies
  3. A Capital Markets Union for Europe
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

A Capital Markets Union for Europe
Markus Demary / Matthias Diermeier / Heide Haas IW-Policy Paper No. 18 13. July 2015

A Capital Markets Union for Europe

Share this article:

or copy the following link:

The link was added to your clipboard!

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. 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.

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
The EU Circular Economy Package
Adriana Neligan IW-Policy Paper No. 9 18. April 2018

Two years later: The EU Circular Economy Package

The European Commission aims to push forward the concepts of ‘recycle, repair and re-use’ as well as waste avoidance. Two years after adopting the Circular Economy Package, EU institutions finally agreed on new EU waste rules.

IW

Content element with id 8880 Content element with id 9713