1. Date
A
STRONGER
EUROPE
WITH
CA PITA L
M A RKETS
UNION
FINA NCE IN
FOOTBA LL
There isno doubt,the face of
football hasevolved and changed.
The changesoff the pitch have had a
major effect on the proceedingson
the pitch.
CURRENT
ECONOM IC
A FFA IRS
All acrossthe globe marketsare
falling,19 of the major 21 stock
marketsare down on the period
aslast year.There are many
economic reasonsbehind this
bearish sentiment.
" THIS
YEA R HA S
BEEN A
GREA T
YEA R FOR
THE
SOCIETY."
DR. KEVIN EVANS
INNOVA TION
A ND
INVESTM ENT
IN THE UK?S
BICYCLE
M A RKET
In recent history the UK?sbicycle
market hasflourished.Increasingly
people are comingto see cyclingas
an excellent way to maintain health
and fitnessand asaviable
commutingoption sentiment.
ISSUE#1,MARCH 2016

2. 3

3. 4 5
A STRONGER
EUROPE WITH
CA PITA L
M A RKETS UNION
by Alexandros Marios Kotsonis
EUROPEAN UNION
2nd Year, B.Sc. Economics

4. 5

5. 6 7
However, the Action Plan of CMU
contains some omissions and
drawbacks with respect to its
objectives. More specifically,there
are certain aspects regarding
financial stability and
macro-prudential policies that
were not emphasized in thisplan.
The CMU initiative is aimed
to build a true single market
across all 28 EU member
states
Firstly, the CMU should aid
financial stability by promoting
more varied funding channels to
the European economy.
Furthermore, the CMU plan
should ensure that the
development of integrated capital
markets would not allow other
systematic vulnerabilities to
gather uncontrollably.
Indeed, a market based financial
system could be more liable to
becoming uncontrolled due to
volatility. For example, a sudden
repricing of risk may contaminate
market and financial institutions
due to balance sheets and
collateral channels.
Furthermore, it may increase the
cost of capital for companies and
may cause financial losses for
households. The present CMU
plan does not deal with such a
development,which isan omission.
Moreover, the CMU plan does not
address possible macro-prudential
risks that can be caused from
market-based financial systems.
The fact that there exist strong
interrelations within market-based
finance systems, which is a possible
way to avoid macro-economic
problems, is twofold. On the one
hand, one has to identify the
potential weaknesses in the
structure and the cyclical
dynamics of the system. On the
other hand, these problems should
be approached using the
appropriate policy actions. As far
as this CMU plan goes, such an
approach isnot evident.
Finally, a well-functioning CMU
plan requires rules that will
protect consumers and investors.
A market-based financial system
works with institutional and
individual investors. This makes it
necessary for the risk bearers to
be well-equipped to evaluate price
risk. This is particularly true for
individual investors, given the cost
that such risk analysis involves.
Thus, appropriate individual
investors? protection is needed.
Although that already exists, such
a body of legislature is not
sufficient and it needsreinforcing.
The City of London is an already
well-developed market that makes
use of the open US and Asian
markets. This means it already
operates in open markets that are
not regulated by any specific state.
EU commissioners may use this
experience in order to obtain a
well- developed functioning CMU
plan. Indeed, English financiers
working in the City can be used as
advisors for the EU Commission in
this undertaking. On the other
hand, the development of an
integrated European market will
open many opportunities for the
City of London. Since the United
Kingdom is a member of the EU,
such an integrated financial
market will exponentially enhance
the activitiesof the City of London.
Consequently, there is a two-way
interaction between the
integrated European financial
market and the City of London.
Traversing this two-way road may
prove to be beneficial to both
sides.
EUROPEAN UNION

6. 36
CA RDIFF F&T JOURNA L
Cardiff University
Cardiff, W ales CF10 3AT UK
journal@cardiff-finance.co.uk
www.cardiff-finance.co.uk