A Capital Markets Union for a Divided Europe

Abstract

The European Commission wishes to create a fully integrated European capital market. The Capital Markets Union (CMU) is intended to make it easier for lenders and borrowers and providers to come into contact one another within Europe, especially across borders. This is regardless of whether it is arranged through the intermediary of a bank, through the capital markets or through alternative channels such as crowdfunding. In addition, more non-bank funding will help to lessen dependence on the traditional banking industry and enhance the ability to cope with economic shocks. But are the measures announced in the CMU Action Plan sufficient to achieve an integrated European capital market? And is the CMU Action Plan still realistic if London, Europe’s financial heart, no longer participates? Moreover, what impact will Donald Trump’s victory in the US presidential election have on the CMU project? This paper takes a critical look at the main aspects of the CMU Action Plan.