FRANKFURT, Nov. 22 (Xinhua) -- European Central Bank (ECB) President Christine Lagarde on Friday outlined a framework to advance the creation of a Capital Markets Union (CMU) among European countries.
Speaking at the 34th European Banking Congress, Lagarde emphasized the urgent need for European nations to integrate fragmented capital markets within the bloc and leverage the flexibility of the European financial system to unlock funding for innovation.
Despite numerous regulatory proposals and non-legislative initiatives introduced since 2015, progress on the CMU has been limited, said Lagarde, attributing this to Europeans' tendency to place savings in low-yield deposits rather than channeling them into capital markets. Even when savings enter capital markets, they often remain confined within individual countries and fail to support innovative companies or sectors.
To address the fragmentation rooted in varying legal practices across European countries, Lagarde proposed the establishment of an EU-wide legal framework to bridge these divides.
German central bank chief Joachim Nagel also recently underscored the need to complete the CMU. In an earlier address at Tokyo University, Nagel highlighted that completing the CMU would enhance the euro area's resilience to geoeconomic fragmentation.
