Why do we need a capital markets union?

The capital markets union (CMU) is a plan to create a single market for capital. The aim is to get money – investments and savings – flowing across the EU so that it can benefit consumers, investors and companies, regardless of where they are located.

A capital markets union will

  • provide businesses with a greater choice of funding at lower costs and provide SMEs in particular with the financing they need;
  • support the economic recovery post-Covid-19 and create jobs;
  • offer new opportunities for savers and investors;
  • create a more inclusive and resilient economy;
  • help Europe deliver its New Green Deal and Digital Agenda;
  • reinforce the EU’s global competitiveness and autonomy;
  • make the financial system more resilient so it can better adapt to the UK’s departure from the EU

New CMU action plan

While progress has been made since 2015, EU capital markets remain fragmented. This means that European citizens and businesses are not able to fully benefit from the deep, competitive, efficient and reliable sources of funding and investment that capital markets can offer. A strong and complete CMU is needed now more than ever, in order to support the economic recovery following the COVID-19 crisis and finance the green and digital transitions.

Against this backdrop, the Commission on 24 September 2020 adopted a new CMU action plan. The plan sets out 16 legislative and non-legislative measures to deliver on three main objectives

  1. to support a green, inclusive and resilient economic recovery;
  2. make the EU an even safer place to save and invest long-term;
  3. and integrate national capital markets into a genuine single market.

More information on the new CMU action plan

The steps towards a CMU taken so far

Efforts to put in place a true single market for capital started with the Treaty of Rome more than 60 years ago and intensified with the free movement of capital, a freedom enshrined in the 1992 Maastricht Treaty and the financial service action plan in 1999. But this objective has not yet been achieved.

The CMU initiative was launched by the Juncker Commission, which adopted the first CMU action plan in September 2015. It sets out a list of over 30 actions to establish the building blocks of an integrated capital market in the EU by 2019.

Measures already implemented

The Commission has largely delivered on the individual actions announced in the 2015 CMU action plan and the 2017 mid-term review. The European Parliament and Member States have so far agreed on 12 out of 13 legislative proposals put forward by the Commission. In addition, the Commission has completed a number of non-legislative measures to further the aims of CMU.

See all the legislative measures taken so far to build a CMU

Studies under the CMU

Since the launch of the first capital markets union action plan in 2015, the Commission carried out a number of studies, prepared by external consultants, to inform its work in specific areas. This research helps the Commission shape policy actions and identify where legislation may be needed.

Study20 July 2020Financial Stability, Financial Services and Capital Markets Union

Feasibility study for the creation of a CMU equity market index family

The purpose is to assess the feasibility of creating a CMU equity market index family that could contribute to the development of EU capital markets.
Study23 July 2020Financial Stability, Financial Services and Capital Markets Union

Study on options for development of online tools and services supporting retail investors in investment decisions

Final report of the study on options for development of online tools and services supporting retail investors in investment decisions.
Study14 February 2020Financial Stability, Financial Services and Capital Markets Union

Study on supply chain finance (SCF)

In-depth analysis of the current state and recent developments in the area of supply chain finance at EU level and within the Member States.
Study16 December 2019Financial Stability, Financial Services and Capital Markets Union

Study on the drivers of investments in equity by insurers and pension funds

As a follow-up to the Mid-term Review of the CMU Action Plan, the European Commission publishes a study on the drivers of equity investments
Study03 December 2019Financial Stability, Financial Services and Capital Markets Union

Study: Analysis of the individual and collective loan enforcement laws in the EU Member States

CMU: eliminating barriers to cross-border investment- independent study on the effectiveness of loan enforcement regimes (insolvency benchmarking)
Study12 October 2018Financial Stability, Financial Services and Capital Markets Union

Feasibility study on European secured notes

ESNs are bonds using a covered bond structure to fund assets not currently permitted under EU law, specifically loans to SMEs & bank infrastructure loans.
Study24 April 2018Financial Stability, Financial Services and Capital Markets Union

Study on the distribution systems of retail investment products

Study carried out by Deloitte Luxembourg for the European Commission.
Study16 February 2018Financial Stability, Financial Services and Capital Markets Union

Study on EU markets for private placements

Identifying market and regulatory obstacles to the development of private placement of debt in the EU
Study20 November 2017Financial Stability, Financial Services and Capital Markets Union

Study on the drivers of corporate bond market liquidity

External study produced by Risk Control Limited
Study26 September 2017Financial Stability, Financial Services and Capital Markets Union

Study on the feasibility of a European personal pension framework

Explore the feasibility of a European personal pensions framework in the context of the capital markets union (CMU) action plan.
Study25 August 2017Financial Stability, Financial Services and Capital Markets Union

Study on covered bonds in the European Union – Harmonisation of legal frameworks and market behaviour

This study examines the current state of the European covered bond markets and the likely costs and benefits of introducing a dedicated EU legal framework.
Study01 June 2017Financial Stability, Financial Services and Capital Markets Union

Study on the effectiveness of tax incentives for venture capital and business angels to foster the investment of SMEs and start-ups

Investigates the part that tax incentives for venture capital & business angels can play in fostering investment, to promote best practice in Member States
Study29 March 2016Financial Stability, Financial Services and Capital Markets Union

Study on the effects of fundamental tax reforms on effective taxation

Informs about whether different fundamental tax reforms could manage to address the debt bias and promote investment, possibly in a revenue neutral way.