The capital markets union is a programme intended to create deeper and more integrated capital markets within the EU’s 28 member states by 2019. The challenges identified by the European Commission include a continued over-reliance on banks for investment in member states, the obstacles placed in the way of investors by borders, and alternating rules and market practices across Europe.
The Commission is seeking to reduce the fragmentation of financial markets, diversify financial sources, facilitate the flow of funds across borders, and enable enhanced access to finance for businesses.
Commission President Jean-Claude Juncker (pictured) commented: “I believe we should complement the new European rules for banks with a capital markets union. To improve the financing of our economy, we should further develop and integrate capital markets. This would cut the cost of raising capital, notably for SMEs, and help reduce our very high dependence on bank funding.”