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Making a reality of Europe’s Capital Markets Union. Bruegel Policy Contribution Issue n˚07 | April 2018

Sapir, André and Véron, Nicolas. and Wolff, Guntram B. (2018) Making a reality of Europe’s Capital Markets Union. Bruegel Policy Contribution Issue n˚07 | April 2018. [Policy Paper]

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    Abstract

    The deepening and integration of the European Union’s capital markets is a long-term structural endeavour. Although difficult to achieve, it is worthwhile for several reasons: a meaningful body of economic analysis strongly suggests that purely bank-based financial systems are more prone to crises and might produce lower growth performance; widely-accepted analysis suggests that cross-border capital market integration can be an important complement to fiscal risk sharing; and the departure from the EU of the United Kingdom – home to the EU’s main capital market centre – makes the project even more relevant. Although integrating and deepening capital markets has been a long standing goal of the EU, actual progress has been limited. The European Commission’s welcome Capital Markets Union (CMU) agenda has led to many legislative proposals to advance the development of EU capital markets. Although the European Council has repeatedly underlined the CMU’s importance, only a few of these legislative proposals have been adopted. At this stage, significant progress will only be feasible if clear priorities are set. We argue that strengthening and expanding the role of the European Securities and Markets Authority (ESMA) should be prioritised because: (a) it is a relatively easily implementable step; (b) it would entrust an institution with driving the agenda forward; and (c) it would put an effective check on the potential financial stability and business conduct challenges that might arise from cross-border capital markets integration. Other major legislation, in particular on business insolvency and on personal pension products, could also be prioritised for completion during the current European Parliament legislative term.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > banks/financial markets
    EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Policy Contributions
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: Multilingual
    Date Deposited: 30 Apr 2018 10:40
    Number of Pages: 13
    Last Modified: 30 Apr 2018 10:40
    URI: http://aei.pitt.edu/id/eprint/93805

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