At this invitation-only event the panellists and invited audience will discuss what sources of equity finance can help Europe emerge from the recession.
As Europe emerges from its deep recession the need to replenish the equity base of enterprises will become very clear. In this panel discussion we set out to explore the different sources of equity finance that could help meet this challenge, and how Europe’s capital markets union could foster more access to finance. We will examine the potential of established private fund managers, and also new models of equity finance by public promotional banks and commercial banks.
This invitation-only event is open only to Bruegel’s members and small number of selected invitees.
Chair: Alexander Lehmann, Non-resident fellow
James Chew, Group Head, Regulatory Strategy, HSBC
Katja Langenbucher, Professor, House of Finance, Goethe-University, Frankfurt
Thomas Wieser, Non-resident fellow
Laurent Zylberberg, President of the European Long Term Investors association (ELTI) and Director of institutional, European and international affairs at Caisse des Dépôts group
President of the European Long Term Investors association (ELTI) and Director of institutional, European and international affairs at Caisse des Dépôts group
Group Head, Regulatory Strategy, HSBC
Professor, House of Finance, Goethe-University, Frankfurt
Invitation only event to discuss Europe’s Capital Markets Union.
Europe has a heavily bank-based financial structure, but bank-based financial structures are associated with higher systemic risk than market-based financial structures. The higher level of systemic risk in Europe suggests caution when pursuing policies that stimulate risk taking and debt creation by banks, especially in the wake of COVID-19. Priority should be given to financial diversification and equity finance.
Meeting the fiscal demands of COVID-19 will require the European Union to borrow on capital markets more than ever, and for European pension funds and households to look more widely for ways to build their nest eggs safely. The EU should take the challenges of the pandemic and Brexit as a chance to get its financial infrastructure house in order.
COVID-19 has triggered a severe recession and policymakers in European Union countries are providing generous, largely indiscriminate, support to companies. As the recession gets deeper, a more comprehensive strategy is needed. This should be based on four principles: viability of supported entities, fairness, achieving societal goals, and giving society a share in future profits. The effort should be structured around equity and recovery funds with borrowing at EU level.
It’s time for the EU to make quick and indispensable progress in forming a capital markets union.
This report presents an overview of the recent trends of capital flows, focused especially on the past year. It provides a detailed analysis at the global level and at the European Union level.
While the euro is now a leading global currency and the European Central Bank has become a comprehensive banking supervisor, Europe’s markets have been treading water.
Completing the banking union is the dominant task in the financial services area for the next five years. In the short term, the Commission should affirm its leadership by pushing for the creation of a credible EU anti-money laundering supervisory agency.
The incoming Commission President has put support for SMEs at the centre of her economic programme. A public-private fund investing in initial public offerings should be carefully targeted, primarily at small firms with risky projects. The announced SME strategy and further measures under the Capital Markets Union programme should address numerous other barriers to both public and private equity finance.
Facilitating the financing of European companies through external equity is a central ambition of European Union financial regulation, including in the European Commission’s capital markets union agenda. Against this background, the authors examine the present use of external equity by EU companies, the roles of listings on public markets, and the regulatory impediments in national laws. They assess to what extent EU market integration has overcome the crucial obstacle of shallow local capital markets.
The monitoring and analysis of capital movements is essential for policymakers, given that capital flows can have welfare implications. This report, commissioned by the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union, aims to analyse capital movements in the European Union in a global context.
Bruegel senior fellow Nicolas Véron talks with Jörg Kukies, state secretary at the German finance ministry, about the next steps to the banking union project in Europe, as well as the potential challenges that lie ahead.