Interactive
Corporate
Interface for
Business
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Capital
Markets
Union
Financial Markets - Europe
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Table of contents
Why is a Capital What benefits
01 Markets Union 03 would it deliver?
necessary?
What would a What challenges
02 capital markets 04 would have to be
Union Look like? overcome in
order to create a
Union?
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01
Why is a Capital
Markets Union
necessary?
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1. Reducing Over-Reliance on
Bank Lending.
Diversify Business Financing:
Economies that rely too heavily on
bank loans are vulnerable to
crises.
The 2008 Global financial crisis
revealed the fragility of bank-
dependent economies.
Increase Financial Resilience: CMU
provides alternative financing to
help businesses maintain capital
during downturns.
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2. Facilitating Innovation &
Technological Advancements
Startup Financing: CMU enhances private
equity and venture capital's support for
innovation.
A CMU encourages different venture
capital markets, crucial for funding
startups and high-growth firms,
particularly in technology and innovation-
Encourage Green driven
& Digital Growth: CMU
industries
draws capital to tech-focused and
environmentally friendly industries.
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One of the most important aspects of
today’s world includes Environment
Friendliness, we all know the our Planet
can only handle so much and many natural
resources are on the verge of depletion.
Hence CMU is necessary to fix this. a
A unified market would,
Promote EU’s Position
Spread Risk
Investing
Europe’s will
Integrated More investor
involvement compete with major
markets lessen financial centers,
the effects of results in more
superior and thereby
regional strengthening the
economical
economic shocks. financial services. EU's global position.
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What would a
capital markets
Union Look
like?
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Increased bonds between
Government & Businesses
By creating a cooperative layout,
the CMU would promote the
exchange of ideas, best
practices, and innovations in
financial services.
Meaning that, financial
technology (fintech) companies
from different EU member states
can test new products and
services in a controlled, cross-
border environment.
Integration of digital ID, e- a
CMU Impact Areas
35%
40% Economic
Integrated Growth
EU Markets
25%
Cross Border
Investment
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There would be Reduced
regulatory fragmentation,
meaning fewer barriers when
moving capital from, say, France
to Germany or Italy.
Companies, especially SMEs, can
access funding from a broader
pool of investors.
Investors can diversify more
easily, reducing systemic risk.
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What benefits
would a CMU it
deliver?
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Increased Advantages for
Customers
Additional Investment Choices &
Better Portfolio - : CMU gives
individual investors more options
and higher profits.
US individual investors profit from
easy access to financial instruments
such as exchange-traded funds
(ETFs) and mutual funds.
Better Retirement & Pension
Savings • Long-Term Growth: Better
investment products make national
pension systems stronger.
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Distribution of Risk Across
Boundaries - Shock Absorption: CMU
lessens the impact of local crises by
distributing risks across areas.
This would make the capital move
from weaker to stronger states.
Promoting FDI, or foreign direct
investment Regulatory Trust: More
overseas investors are drawn to
countries with unified financial
regulations.
As an illustration, FDI increased after
the Euro as a result of lower
currency risk and increased investora
A CMU will also lower the cost of capital because when all the
markets are combined, there will be high market liquidity, this
attracts Investors since they can now exit market position easily and
hence demand less premium.
Hence a Cheaper Borrowing will only help EU become stronger and
more productive in other sectors and lead to fast development. a
What challenges
would have to
be overcome in
order to create
a Union
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Major Challenges.
Europe is a multilingual and
multicultural union, and this adds to the
challenge. Differences in language and
culture can slow down communication
and decision-making.
Most financial institutions still prefer
to invest in their own country. This is
called home bias. It leads to an uneven
distribution of money, even if better
investment opportunities exist
elsewhere in the EU.
Each EU country has its own legal and
financial systems which are shaped by
history, culture, and past policies. This
means different rules for things like
mortgages, credit, and investment. a
These differences make it difficult to
Tax laws and trading rules vary from
country to country. This creates
barriers for investors and makes
cross-border trading more expensive
and less efficient.
Countries using the euro are
automatically supervised by the
European Central Bank. Other
countries, like Sweden or Poland, use
their own national rules. This creates
uneven banking rules across Europe,
which makes financial systems harder
to manage and less stable.
The banking rules are very different
between countries. For example,
Lithuania and Estonia are very friendly
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Challenges could include other personal bias from individuals not
wanting to be governed by a particular centralized entity hence this
could turn their votes against the integration of the markets.
Hence we can conclude that, A Capital Markets Union is very important
for Europe's Financial Strength. It will help EU with Investment, encourage
economic growth. And although, there are challenges like Inconsistent
Legal regulations, Different banking regulations, different Supervisory
mechanism, Overcoming these challenges and forming a CMU could
unleash EU’s true economic potential and growth.
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Thanks!
• Group 4 :
Shivam Ravindra Naudiyal
Rakshita Nitin Chawla
Saint San Aung
Dev Desai
For : Enda Murphy
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References
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References
Photos:
• Photo by Antoni Shkraba:
[Link]
• Photo by RDNE Stock project: [Link]
• Photo by Photo By: [Link]: [Link]
• Photo by RDNE Stock project: [Link]
• Photo by Ketut Subiyanto: [Link]
• Photo by Pixabay: [Link]
• Photo by SevenStorm JUHASZIMRUS: [Link]
• Photo by Pixabay: [Link]
• Images were downloaded from the Website –[Link]
