The Capital Markets Union as put on the agenda of the European Commission by President Jean-Claude Juncker is the next step towards the integration of financial markets.

It reflects the shift in political priorities from crisis solving towards meaningful growth and reduction of unemployment levels. The overarching objective is to create growth and jobs for Europe based on stable and liquid capital markets.

The Capital Markets Union is a framework programme which will develop the ‘How to get there’. It is about building on the link between economic growth and capital markets, i.e. strengthening capital markets to foster growth. Bank funding has been decreasing in response to higher capital and liquidity requirements. To close the gap in needed funding, alternative non-bank funding channels need to be further developed. Ultimately, the Capital Markets Union should support efficient capital allocation throughout the EU leading to a broader and more efficient financial system.

As a regulated provider of market infrastructure to global capital markets and marketplace organiser, Deutsche Börse Group is a key player within the establishment of the Capital Markets Union. Market infrastructure providers are predestined and well positioned to contribute to the public consultation process on what features the Capital Markets Union should encompass.

Deutsche Börse Group has elaborated six core principles which we consider prerequisites to achieve a functioning Capital Markets Union. The paper at hand describes these principles and their key elements in detail.

1. Revive investor trust
2. Improve non-bank funding
3. Promote financial stability
4. Increase transparency
5. Foster harmonisation
6. Shape the supporting regulatory and supervisory environment

The Capital Markets Union represents a joint vision for policymakers, as well as industry and societal stakeholders, to further integrate and deepen European financial markets across all 28 EU Member States.