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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
EU Capital Markets Union: An Alluring Opportunity or a Blind Alley?: Concept and Micro-Perspectives of Cmu. Vierteljahrshefte Zur Wirtschaftsforschung

EU Capital Markets Union: An Alluring Opportunity or a Blind Alley?: Concept and Micro-Perspectives of Cmu. Vierteljahrshefte Zur Wirtschaftsforschung

Deutsches Institut Für Wirtschaftsforschung

Paperback

Series: Vierteljahrshefte Zur Wirtschaftsforschung

EconomicsInvesting & Finance

Currently unavailable to order

ISBN10: 3428153596
ISBN13: 9783428153596
Publisher: Duncker & Humblot
Published: Nov 2 2017
Pages: 147
Weight: 6.19
Language: English
On September 30, 2015, the European Commission
adopted an action plan to create a European Capital Markets Union (CMU). The chief
purpose was to ease the access of small and mediumsized companies as well as
start-ups to funds, in particular through raising funds in public capital markets.
CMU should also create an environment conducive to long-term, sustainable investment,
including in infrastructure. Concurrently, CMU should produce a more market-based and
unified financing system within the European Union.

This proposal for deep structural change in national financial markets rests on two
explicit diagnoses: (1) Europe is too bank-dependent, which impedes growth. And, (2)
an integrated (de-segmented) capital market allows for more cross-regional risk
sharing, as appropriate in a monetary union.

The core goals of the proposed CMU are (1) promoting the securitization of bank loans
to SMEs; and (2) the channeling of private savings directly (without involvement of
banks) into capital market products. In its green paper, Building a Capital Markets
Union , the European Commission holds that, stronger capital markets would
complement banks as a source of financing, and would unlock more investment for all
companies, especially SMEs, and for infrastructure projects. In addition, a CMU
would attract more investment into the EU from the rest of the world; and make the
financial system more stable by opening up a wider range of funding sources. This,
of course, begs the question, and raises a policy issue at the same time: Are current
plans for implementing a European CMU capable of turning these promises into reality?
Upon its launching, the CMU initiative touched off controversial debates. Proponents
hold that CMU can reduce financial fragmentation in Europe, support cross-border
financial flows and foster access to finance, especially for SMEs. In contrast,
critics consider CMU as an initiative ignoring analytical as well as practical
lessons taught by the Great Financial Crisis, and resuming the financial deregulation
efforts, betting again on the wrong set of institutions and instruments.

In two issues of the Vierteljahrsheft zur Wirtschaftsforschung, we address the major
aspects, having a bearing on this decisive policy matter. Issue 1 focusses on the EU
Capital Markets Union's concept and its consequences from a micro-perspective. Issue
2 takes a macroeconomic or systemic angle, analyzing inter alia corollaries for
monetary policy and risk-sharing across the Euro Area.

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