ECB President
Lagarde: Europe urgently needs a unified capital market
Europe needs a lot of money to meet the challenges of the next few years. But there is no common capital market. Now increasing tensions are putting Europeans under pressure to act.
According to ECB President Christine Lagarde, Europeans urgently need to make progress in integrating their capital markets in view of the threat of trade conflicts. The Capital Markets Union is “the key to becoming more resilient in a fragmented global economy,” said the President of the European Central Bank (ECB) on Friday at the “Frankfurt European Banking Congress”.
“Capital markets are the missing link for Europeans to transform their high savings into greater wealth – which will ultimately enable them to spend more and strengthen our domestic demand,” Lagarde argued. “However, this growing urgency is not matched by tangible progress towards the Capital Markets Union, largely because its implementation remains poorly defined.”
The Capital Markets Union is essentially about reducing bureaucratic hurdles between the individual states of the European Union in order to create a Union-wide internal market for capital. Companies would then have more opportunities to raise money, for example. The EU Commission’s plans have been on the table since 2015.
The EU’s goal is also for more small investors to invest in the local financial markets so that more capital is available for the green and digital transformation. Europe must offer savers products that are accessible, transparent and affordable, says Lagarde: “In my opinion, a ‘European savings standard’ – a standardized, EU-wide package of savings products – is the best way to achieve these goals. “
However, when Europeans’ savings reached the capital markets, they did not spread throughout the European economy. “Capital in Europe is either trapped within national borders or migrating to the United States,” Lagarde said.
European Securities and Exchange Commission
Last year, Lagarde advocated for a European stock market regulator at the banking congress in order to overcome the fragmentation of the European capital market. While the strong capital market in the USA has benefited from the SEC’s uniform supervision for decades, direct control in Europe largely takes place at the national level, Lagarde said on Friday at a banking congress in Frankfurt. This leads to fragmentation in the application of EU regulations.
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dpa
Source: Stern
