Earlier this week, French president Emmanuel Macron and German chancellor Olaf Scholz penned a joint op-ed in the Financial Times calling for a renewed focus on “competitiveness” over the next five-year EU mandate.
The EU’s capital markets are less developed and integrated than those of other advanced economies or even the EU’s single market for goods, labour and services.Hubristic Woodford was the orchestrator of his own downfallTo put this into perspective, in the EU, bank loans account for 75 per cent of corporate borrowing and bond markets for 25 per cent. The inverse is true in the US.
For the past decade we have spoken about a capital markets union , but progress has been extremely slow. Within a proper functioning capital market, Ireland is ideally placed to be a leading financial centre. One of the key reasons behind the depth of US capital markets is the active range of participants investing and trading in securities. Having highly liquid markets helps to keep prices and costs for investors down, supporting further activity.
However, for this sector to continue to grow in Ireland, it is important to have a proportionate regulatory framework that reflects the nature, size and complexity of these entities. With it, Ireland can become the go-to location for investment firms growing or establishing their EU business, placing us in a unique position to build a deeper and more sophisticated financial services industry.