Overview of the capital markets union
The capital markets union (CMU) is a plan of the European Commission to mobilise capital in Europe. It will channel it to all companies, including SMEs, and infrastructure projects that need it to expand and create jobs.
Deeper and more integrated capital markets will
- provide businesses with a greater choice of funding at lower costs
- offer new opportunities for savers and investors
- make the financial system more resilient
The creation of a true single market for capital in the EU by 2019 is a key element of the Investment Plan announced by the Juncker Commission in November 2014.
CMU in a nutshell
- investment in Europe remains heavily reliant on banks
- there are significant differences in financing conditions between EU countries
- there are differing rules and market practices for products like securitised instruments or private placements
- shareholders and buyers of corporate debt rarely go beyond their national borders when they invest
- many SMEs still have limited access to finance
- develop a more diversified financial system complementing bank financing with deep and developed capital markets
- unlock the capital around Europe which is currently frozen and put it to work for the economy, giving savers more investment choices and offering businesses a greater choice of funding at lower costs
- establish a genuine single capital market in the EU where investors are able to invest their funds without hindrance across borders and businesses can raise the required funds from a diverse range of sources, irrespective of their location