Capital Markets Union – Promising Prospects for Corporate Financing?

This paper examines the implications of the Capital Markets Union (CMU) for corporate financing. Targeting the convalescence of European economic growth, this major regulatory project significantly changes the financial environment faced by European companies. We use a three-step approach to assess whether the CMU opens promising prospects for corporate financing. We consider the objectives’ consistency and desirability first, the justification of market interventions second and the reforms’ effectiveness and efficiency third. Our findings are mixed. The reforms are justified and effective and strive toward sound objectives. Their efficiency depends on the final design though. The CMU’s overall benefit thus remains to be seen.