In a report on the performance of financial markets in 2020 published on Wednesday 28 October, the Association for Financial Markets in Europe (AFME) and ten other organisations, including EFAMA, Invest Europe and Pensions Europe, stressed the need for urgent action to ensure “a genuine, globally competitive Capital Markets Union (CMU)”.
The organisations believe that, although the capital markets have provided record amounts of funding to support the European economy in 2020, the lack of progress with the CMU could hold back economic recovery in Europe.
The report shows that funding from capital markets instruments has actually recorded a 44% year-on-year increase over the last twelve months, resulting in an increase in market finance for businesses from 11% in 2019 to 14.5%.
However, the organisations believe that the dramatic increase in bank lending to SMEs (€573 billion in the first half of 2020) means that the EU remains heavily dependent on bank lending.
Similarly, while Member States have taken steps to promote innovation in their economies, investment in finance-related new technologies is still lower than in other major regions such as the US and China.
Adam Farkas, the Chief Executive Officer of AFME, said in a statement: “These results highlight the necessity for urgent action to encourage deep and extensive European capital markets capable of meeting the needs of borrowers and savers and thereby further promoting long-term economic growth”.
The report can be found at: https://bit.ly/34ye1NT (Original version in French by Marion Fontana)