The economic impact of European capital market integration

Fabrizio Venditti (), Michele Caivano (), Pietro Cova (), Kevin Pallara () and Massimiliano Pisani
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Fabrizio Venditti: Bank of Italy
Michele Caivano: Bank of Italy
Pietro Cova: Bank of Italy
Kevin Pallara: Bank of Italy

No 957, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Enhancing innovation and productivity is a primary challenge for the European economy. To achieve this goal, it is essential to step up investment in innovative projects. Advancing the integration of capital markets, a key objective of the Savings and Investment Union, can be pivotal in this effort by reducing financing costs and strengthening the investment ecosystem. We argue that the integration of European capital markets – including the introduction of a common European safe asset – could raise investment levels by approximately 1 per cent of GDP. Over a ten-year horizon this would raise GDP by 1.5 per cent. If additional investment were focused on R&D spending, the impact would be three times as great.

Keywords: Capital Market Union; Savings and Investment Union; capital market integration; safe asset; investment; R&D (search for similar items in EconPapers)
JEL-codes: E22 F36 G20 O16 (search for similar items in EconPapers)
Date: 2025-07
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