One giant leap for integration

 

The financial crisis was a huge blow to the progress of financial integration in the eurozone – integration that was a central objective of monetary union and the single market. However, narrowing spreads between the bond yields of “core” EU countries, in particular Germany, and those of the “peripherals”, such as Italy, would suggest that integration has recovered substantially. It has been nursed along by specific policies: outright monetary transactions (OMTs, or the buying up of “peripheral” sovereign debt in the secondary market); quantitative easing by the ECB; banking union; and, soon, capital markets union (CMU).

 

Commission confusion

 

Talk of capital markets union (CMU) is all the rage among EU policy-makers, and a rather different form of “rage” to that over Greece. So fashionable is CMU planning in policy circles that it is easy to forget that a central building block will come into force on 3 January, 2017, when MiFID 2/MiFIR becomes operational. This will have revolutionary implications for the relationship between investors and the traders and issuers of securities.