Key elements of the European Commission’s action plan for capital markets union (CMU) are now beginning to take shape, and the current key challenge is to maintain the scale of ambition while delivering concrete actions. In its Green Paper on CMU, the Commission set out a compelling case to meet Europe’s challenges around jobs, growth and competitiveness by better linking savers with investment needs.
Why is this a priority for Europe now? The financial crisis in recent years has proved one thing - there is a crying need to put European-wide legislation in place to prevent this sort of crisis from happening again. The crisis also showed that Europe’s small and medium-sized companies (SMEs) rely heavily on banks for funding and that too little focus was on funding from capital markets.