Capital markets union: a deep dive - Five measures to foster a single market for capital

The European Union aims to establish a single market for capital to promote economic growth and resilience. A well-developed capital market can benefit businesses, households, and financial stability. The Capital Markets Union (CMU) initiative aims to achieve five strategic objectives, including supporting innovation, financing the twin transition, and strengthening alternatives to bank financing. Despite progress made over the past decade, challenges remain, and a renewed effort is needed to move forward. To facilitate access to capital markets, a new standard for a European savings and investment product should be created. Expanding capital markets across borders requires an integrated supervisory ecosystem, a unified trading and post-trading landscape, and a more active securitisation market. The paper also highlights the need to channel capital towards innovative firms by increasing opportunities for equity and venture capital financing. Longer-term initiatives are necessary, including addressing barriers stemming from the lack of harmonisation in insolvency, corporate, and taxation regimes. Additionally, designing a safe asset for Europe, completing the Banking Union, and promoting financial literacy and inclusion are essential. By taking these steps, the CMU can support economic growth, resilience, and financial stability in the European Union.