ECB, Panetta: “Europe needs a full union of capital markets”

“It would improve the economic structure of Europe and benefit the euro area”

“The global landscape is evolving rapidly and Europe needs to keep pace, if not lead, with change, strengthen its resilience to shocks and invest strategically. Central to this strategy is the creation of an integrated European capital market“. The need to complete the capital markets union is relaunched in a comment on the ‘Politico’ Fabio Panetta, member of the Executive Committee of the ECB and future governor of Bank of Italy.

A ‘fully functioning’ capital markets unionexplains, “it would improve the economic structure of Europe and benefit the euro area“. It would allow us, warns Panetta, “to reap the benefits of capital markets at the euro area level and to facilitate greater risk sharing among member countries”. “At the moment, barriers between national markets discourage cross-border investment , leaving European businesses and households largely dependent on national funding, as well as excessively exposed to national economic shocks”. “By eliminating these barriers – he adds – the Union would help the flow of investment throughout the euro area, diversifying risks and mitigating the effects of local shocks”.

There is an urgent need, he adds, “for the Union to complement traditional banking channels in financing innovation vital to Europe’s future growth, particularly in the energy and technology sectors. Finally, it would be beneficial for the implementation of the monetary policy of the European Central Bank” he concludes.