DP12761 The Capital Markets Union: Key Challenges

Author(s): Franklin Allen, Lubo? Pástor
Publication Date: February 2018
Date Revised: May 2018
Keyword(s): Capital Markets Union
JEL(s): G18, G28, G38
Programme Areas: Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12761

In September 2015, the European Commission announced the first actions of its plan to build a Capital Markets Union in Europe. We describe the key features of the Commission's plan and discuss the economic rationale behind it. The plan has many strengths but also some weaknesses, such as limited ambition in the supervision and enforcement of securities regulations. Other challenges to the development of European capital markets include the financial transactions tax, the low-interest-rate environment, cultural reasons, and potential political opposition.