Capital markets union in Europe: Why other unions must lead the way

Viral Acharya and Sascha Steffen

No 4/2016, ZEW policy briefs from ZEW - Leibniz Centre for European Economic Research

Abstract: In 2016, the Eurozone is still coping with the consequences of two financial crises that revealed the shortcomings of an incomplete monetary union. The European economy suffered two severe recessions and a sustainable growth path is still elusive. Risks in the banking system and a severe banking sector debt-overhang played a major role in both crises as Eurozone firms are heavily reliant on bank financing. To foster economic growth in the Eurozone, the European Commission suggested the creation of a capital markets union, in which local capital markets are developed further and integrated across borders as alternative sources for corporate finance. In this paper, we argue that a capital markets union cannot work without a banking union and fiscal union in place.

Date: 2016
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Journal Article: Capital Markets Union in Europe: Why other Unions must lead the Way (2016)
Journal Article: Capital Markets Union in Europe: Why Other Unions Must Lead the Way (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewpbs:42016

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