What is at stake?
An effective Capital Markets Union reduces the fragmentation of fi nancial markets and at the same time improves their efficiency and stability. A revival of the securitisation market alone would generate € 100 billion of additional financing resources for the real economy.
Priorities of German Business
The Capital Markets Union will only be a success if it is not frustrated by excessive financial market regulation. Inconsistencies between various regulatory requirements lead to high hurdles for corporate financing.
Well regulated securitisation markets open up new routes into corporate financing. To strengthen markets for high quality securitisations, capital adequacy requirements for banks and insurance companies should therefore be reduced.
Uniform standards for market practices and documentation obligations could make private placings in the EU more attractive. To dismantle regulatory hurdles and costs for raising capital, publication requirements should be streamlined.
Europe needs more risk capital, inter alia in order to master the transformation to a digital economy. To this end, the tax and regulatory environment must be adapted.
Financing structure in the EU primarly bank-based
Structure of external financing of companies in the EU, in %
Structure of external financing of companies in the USA, in %
Financing via the capital markets plays a much smaller role in the EU than in the USA. Hence, capital market instruments couldadd to companies’ sources of fi nance in many Member States, complementing tried and tested bank loans.
Source: Deutsche Bank Research, 2015