The Politics of Capital Markets Union

22 Pages Posted: 7 Aug 2019 Last revised: 17 Sep 2019

See all articles by Wolf-Georg Ringe

Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics; University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: Augst 7, 2019

Abstract

EU policymakers are currently implementing the capital markets union (CMU) agenda—a collection of individual steps that, taken together, should strengthen cross-border market integration in EU capital markets. However, the imminent departure of the United Kingdom from the EU reshuffles the cards in this project, since the absence of the United Kingdom as the continent’s most developed capital market jeopardizes the objective of creating a truly Europe-wide deep and liquid market that merits its name.

This paper argues that the purpose of the CMU project can and should be redefined. The initial thrust behind the project in 2014–2015 seems to have been to court the British public in a bid to influence the Brexit referendum. After the UK’s vote to leave, that objective no longer provides the glue that holds the CMU agenda together. Instead, I show that CMU can helpfully be redefined and reexplained in an entirely new context. Specifically, the CMU agenda provides a sensible set of measures to strengthen the architecture of the Eurozone: cross-border integration of national financial markets holds the promise of promoting so-called ‘private risk sharing’ that can serve as an important boost to reinforce the fragile framework of the common currency.

This paper makes two points. First, it explores the initial motivation behind launching the CMU agenda. The paper argues that the initial purpose was—among other things—a political bid to influence the growing anti-EU attitude and to win over the City of London. Since this strategy was ultimately unsuccessful—at least, it did not suffice to secure a majority voting for a UK-wide ‘remain’ vote—the entirety of the CMU project was put into question. In a second step, the paper shows that the CMU agenda currently on the table—if sufficiently reinforced and expanded—may find a new purpose in strengthening the Eurozone architecture. The latter point comes amid the ongoing policy debate on the future of the Euro.

Keywords: capital market union, political economy, Brexit, Eurozone, private risk-sharing

JEL Classification: D72, G28, K22

Suggested Citation

Ringe, Wolf-Georg, The Politics of Capital Markets Union (Augst 7, 2019). European Corporate Governance Institute - Law Working Paper No. 469/2019, Oxford Legal Studies Research Paper No. 51/2019, Available at SSRN: https://ssrn.com/abstract=3433322 or http://dx.doi.org/10.2139/ssrn.3433322

Wolf-Georg Ringe (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49 40 42838 7787 (Phone)
+49 40 42838 6794 (Fax)

HOME PAGE: http://www.ile-hamburg.de

University of Oxford - Faculty of Law

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

HOME PAGE: http://www.law.ox.ac.uk/people/wolf-georg-ringe

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://ecgi.global/users/wolf-georg-ringe

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
201
Abstract Views
870
rank
170,813
PlumX Metrics