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From November the European Central Bank will be the single supervisor for top lenders, raising questions about how fragmentation in equity and bond markets could also be reduced.
The new European Commission, the EU's executive, starts work under Jean-Claude Juncker in the same month, with talk in Brussels that a capital markets union may also form a key strand of broad reforms aimed at generating growth and jobs. The commission declined to comment and has made no statements on the topic. German bankers have said a top official mentioned it privately to them, however, saying that unlike the banking union, capital markets union refers to all 28 EU states.
"It's taking the single market to the next step," a European banker in Brussels said.
So far, the term is little more than a catchy title for complex efforts to secure more financing from markets for companies and infrastructure projects that will fuel growth, said Graham Bishop, who advises the EU on financial services.