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26 Jan 2015
There Is A Need For Integrated Capital Market In The Euro Area - ECB Mersch
FXStreet (Mumbai) - European Central Bank (ECB) Executive Board member Yves Mersch speaking at the 'New Face of the Euro' exhibition over the weekend, stated that deeper integration in the euro zone, including a capital markets union would ensure an efficient and location-independent allocation of financial resources, as well as enable better protection from economic shocks.
Key Quotes:
"In a monetary union one should also expect a fully integrated capital market,"
"That would mean, for example, that a creditworthy entrepreneur from Osnabrück could issue a bond without any problems in the Netherlands. Or an entrepreneur from Lisbon could do the same in France. After all, France, Portugal, the Netherlands, Germany and 15 other countries share the same currency."
"A truly integrated capital market would not only benefit the European economy because it would ensure an efficient and location-independent allocation of financial resources. It would also bring with it a greater distribution of risk, “
"Economic shocks can then be better absorbed because countries receive a certain amount of protection from the private sector."
"In my view," he continued, "we should also have a comprehensive resolution regime for central securities depositories (CSDs) in order to level the playing field for banks and non-banks.... In general, what is important is that financial market regulation be harmonized so that a single European capital market can function smoothly. It is very important to keep in mind that harmonization and standardization is not the same thing as seeing everything at par or interfering with cultural identities. "
Seeing the Monetary Union in EU as incomplete, the ECB policymaker said it would be wrong to sit back and leave the project in its existing form. Developing the union "is a permanent undertaking," "It is time that this affirmation resulted in action."
Key Quotes:
"In a monetary union one should also expect a fully integrated capital market,"
"That would mean, for example, that a creditworthy entrepreneur from Osnabrück could issue a bond without any problems in the Netherlands. Or an entrepreneur from Lisbon could do the same in France. After all, France, Portugal, the Netherlands, Germany and 15 other countries share the same currency."
"A truly integrated capital market would not only benefit the European economy because it would ensure an efficient and location-independent allocation of financial resources. It would also bring with it a greater distribution of risk, “
"Economic shocks can then be better absorbed because countries receive a certain amount of protection from the private sector."
"In my view," he continued, "we should also have a comprehensive resolution regime for central securities depositories (CSDs) in order to level the playing field for banks and non-banks.... In general, what is important is that financial market regulation be harmonized so that a single European capital market can function smoothly. It is very important to keep in mind that harmonization and standardization is not the same thing as seeing everything at par or interfering with cultural identities. "
Seeing the Monetary Union in EU as incomplete, the ECB policymaker said it would be wrong to sit back and leave the project in its existing form. Developing the union "is a permanent undertaking," "It is time that this affirmation resulted in action."