European Central Bank Report: Completing Banking Union and Capital Markets Union Is Crucial

The European Central Bank (ECB) has shared an update that says it’s crucial to complete the banking union and capital markets union.

ECB notes that there has been “disappointing progress in euro area financial integration since the start of monetary union.”

According to a blog post from the ECB, policies are urgently needed in order “to mobilize savings, develop euro area bond and equity markets.”

A better-integrated euro area internal market for financial services is “necessary to secure European economic and financial resilience, the European Central Bank (ECB)’s latest report on Financial Integration and Structure in the Euro Area shows.”

This is all the more crucial in the face of  “the growing need for investments to meet common challenges such as the green and digital transitions, security and aging populations.”

The euro area has demonstrated resilience “during crises, but progress in financial integration has been disappointing.”

Indicators of financial integration have “declined significantly over the past two years, with no sizeable increases since the start of monetary union.”

Policy action is now urgently needed “to mobilize available savings, develop euro area bond and equity markets, and make these markets more attractive to foreign investors.”

Achieving a fully integrated financial services market also “requires facilitating cross-border banking and harmonizing regulatory frameworks and disclosure requirements.”

ECB staff reportedly presented the report on Financial Integration and Structure in the Euro Area “on 18 June 2024 at the high-level conference on European financial integration.”

As covered, the European Central Bank is the “central component of the Eurosystem and the European System of Central Banks as well as one of seven institutions of the European Union.”

It is considered to be one of the world’s most important central banks.

The Governing Council is the “main decision-making body of the ECB.”

It consists of the six members of “the Executive Board, plus the governors of the national central banks of the euro area countries.”

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