Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Capital Market Union: 
Is Eurosystem ready for it?
What is it? 
• No concrete or official definition 
• The harmonization of rules across Member States in 
order to eliminat...
Five Pillars 
• Removing the remaining obstacles to free movement 
of capital 
• Transparency 
• Spreading best practices ...
“Jobs, Growth and Investment” Package 
• Improve the investment environment 
• Long-term financing of the economy such as ...
Financial instruments 
• Securitised bank loans 
• Shadow banking 
• Bonds 
• Private placements 
• Equity 
• Venture capi...
Five main benefits 
• Providing finance for the economy 
– Sluggish growth rate 
– “EU Importance 2020” – Transport , Ener...
Five main benefits 
• Helping to absorb shocks 
– “Bank-Centricity” magnified the original crisis 
– CMU can act as a shoc...
Five main benefits 
• Creating more competitive markets 
– Bank Centric financial system which is not 
competitive as it s...
Challenges 
• Long and complex legislative process 
• A significant structural change for the 
European financial system (...
References 
• "A Capital Markets Union Could Be next Thing in EU's In-tray." | Reuters. 3 July 2014. 
Web. 14 Nov. 2014. <...
• Hill, Jonathan. "Hearings of European Commissioners-designate." Europarl. European 
Union, 30 Sept. 2014. Web. 14 Nov. 2...
Capital market is eurosystem ready for it?
Capital market is eurosystem ready for it?
Upcoming SlideShare
Loading in …5
×

Capital market is eurosystem ready for it?

582 views

Published on

Capital Market Union, a new buzz in EU

Published in: Economy & Finance
  • Be the first to comment

  • Be the first to like this

Capital market is eurosystem ready for it?

  1. 1. Capital Market Union: Is Eurosystem ready for it?
  2. 2. What is it? • No concrete or official definition • The harmonization of rules across Member States in order to eliminate the barriers that prevent the integration of capital markets What is not? • Merger of European stock exchanges • Reducing bank financing
  3. 3. Five Pillars • Removing the remaining obstacles to free movement of capital • Transparency • Spreading best practices • Standardisation • Coordinating taxation
  4. 4. “Jobs, Growth and Investment” Package • Improve the investment environment • Long-term financing of the economy such as revival of Securitisation market • Lowering the costs of raising capital • Finding channels other than banks for companies' funding
  5. 5. Financial instruments • Securitised bank loans • Shadow banking • Bonds • Private placements • Equity • Venture capital • Securities trading
  6. 6. Five main benefits • Providing finance for the economy – Sluggish growth rate – “EU Importance 2020” – Transport , Energy and telecom sector - € 1 Trillion?? – Banks are unable to finance after the crisis – Need for alternative financing options (Less developed) – “Bank-Centric” Europe. Bank finances are four times of its GDP. U.S only 80% – In U.S only 30% of the finance is from banks whereas in Europe it is 70%
  7. 7. Five main benefits • Helping to absorb shocks – “Bank-Centricity” magnified the original crisis – CMU can act as a shock absorbers • Enabling more effective monetary policy – Quantitative easing – Example – US Federal Reserve, Bank of England and ECB – ECB is prohibited from monetary financing – But, when annual inflation rate 0.3%, ECB bought Asset backed securities
  8. 8. Five main benefits • Creating more competitive markets – Bank Centric financial system which is not competitive as it should be – In most of the member states, to five lenders have a combined market shares of 60% – Banks finances well established business – SMEs or sectors which are in need of capital are ignored • Providing the UK with another good reason to stay in the EU
  9. 9. Challenges • Long and complex legislative process • A significant structural change for the European financial system (Time)
  10. 10. References • "A Capital Markets Union Could Be next Thing in EU's In-tray." | Reuters. 3 July 2014. Web. 14 Nov. 2014. <http://uk.reuters.com/article/2014/07/03/uk-eu-markets-idUKKBN0F814O20140703>. • Abascal, María, and Lucía Rodríguez. "A Capital Markets Union for Europe: Preliminary Reflections." Banco Bilbao Vizcaya Argentaria S.A. Web. 14 Nov. 2014. <https://www.bbvaresearch.com/en/publicaciones/a-capital-markets-union-for-europe-preliminary- reflections/>. • Dixon, Hugo. "Unlocking Europe’s Capital Markets Union." Center for European Reforms. CER, 31 Oct. 2014. Web. 14 Nov. 2014. <http://www.cer.org.uk/sites/default/files/publications/attachments/pdf/2014/unlocking _europes_capital_markets_union_hugodixon_15.10.14-9870.pdf>.
  11. 11. • Hill, Jonathan. "Hearings of European Commissioners-designate." Europarl. European Union, 30 Sept. 2014. Web. 14 Nov. 2014. <http://www.europarl.europa.eu/EPRS/Commissioner_hearings/EPRS-Briefing-538940- Financial-Stability-Financial-Services-and-Capital-Markets-Union-FINAL.pdf>. • Wilson, Karen. "Bruegel." Crowdfunding: Broadening Europe's Capital Markets. 10 Oct. 2014. Web. 14 Nov. 2014. <http://www.bruegel.org/nc/blog/detail/article/1456- crowdfunding-broadening-europes-capital-markets/>. • OECD (2013), Science, Technology and Industry Scoreboard 2013, calculations based on PwCMoneyTree, EVCA/Thomson Reuters/PwC and EVCA/PEREP_Analytics

×