ECB’s Nagel: Europe Needs Greater Integration of Capital Markets

7 October 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Monday that Europe needed to take more steps towards a capital markets union, which he characterised as essential.

Speaking at the ceremony to celebrate the European Commission joining the European repo market at the Deutsche Börse, Nagel said that this was a ‘significant milestone’ that showed how essential capital markets were in order to finance new investment needs.

‘This [event] is particularly important as much investment will be needed in the areas of digitalisation and decarbonisation in the future. Of course, bank loans will likely continue to play a vital role in financing these investments. But there is also substantial potential for more financing through capital markets’, he said.

Nagel recalled that he had long been a supporter of higher integration of European capital markets and said that taking more steps here was ‘essential in the areas of securitisation, insolvency laws, and venture capital’.

‘A transparent and high-quality securitisation market would enable banks to transfer parts of their loan portfolios to the capital market. This would relieve their balance sheets and create scope for additional loans’, he said.

A common insolvency system would further enable cross-border investment and allocation of resources while more access to venture capital investors would allow European start-ups to become more appealing to markets, he added.