Capital and Europe: Chance to create single capital market, significantly helping European firms and investors
Abstract
Earlier than a dust risen up by the launch of the banking union could settle and the common system of how to treat banks in a bankruptcy could be fine-tuned, Brussels already lives by plans of a new "union" in the field of finance. We are talking about one of the priorities of Jean-Claude Juncker, the President of the European Commission, about a formation of a single market for capital, so called Capital Markets Union (CMU).
It is not a union in a true sense of the word, it rather follows verbally the unfinished banking union. Juncker's ambition is to create an integrated capital market of the EU, as capital markets still stay fragmented among the national economies.
If it was a success, the access of especially small and medium enterprises to funding would improve and dependence of the European economy on banks would decrease. Banks in fact provide the European economy with about 70 per cent of funding, while in the USA 80 per cent of funding comes from financial markets.