Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Capital Markets Union-Implications for Supervision and Institutional Arrangements
IMF Staff Country Reports, July 25, 2025
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Bibliographic details
- Published: July 25, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229019880.002
Overview
- The European Union (EU) has renewed efforts to grow and deepen its capital markets through the Capital Markets Union (CMU).
- Building on the Financial Services Action Plan and post-trade consolidation and efficiency work, the European Commission has proposed legislative and non-legislative initiatives to:
- enable easier access to capital;
- enhance the efficiency and scalability of EU capital markets;
- reduce dependence on bank financing.
- Fragmentation of capital markets in the euro area (EA) is driven by national differences in securities, corporate, tax and pensions laws and policies.
- Such differences create significant uncertainty, for example determining which law is applicable and how cross-border financial investments will be treated in insolvency, and create barriers to cross-border provision of investment products.
- The Technical Note focuses on proposals pertaining to institutional arrangements and the supervisory framework, including how to enable a safe transition towards centralizing supervision of at least some types of entity at the EA level.
Key Findings and Analysis
- Fragmentation factors:
- national differences in securities, corporate, tax and pensions laws, policies.
- Consequences of fragmentation:
- significant uncertainty on applicable law and insolvency treatment for cross-border financial investments;
- barriers to cross-border provision of investment products.
- Goal of CMU initiatives:
- easier access to capital;
- enhanced efficiency and scalability of EU capital markets;
- reduced dependence on bank financing.
- Focus of the Technical Note:
- institutional arrangements and supervisory framework reforms;
- enabling a safe transition towards centralizing supervision of at least some entity types at the EA level.
Policy Recommendations and Institutional Considerations
- Reduce barriers created by national legal and policy divergences over time to support CMU success.
- Consider proposals that centralize supervision for at least some entity types at the euro area level as part of a safe transition.
- Address legal uncertainties around cross-border investments and insolvency to facilitate cross-border product provision and integration.
Publication and Metadata
- Publication type: IMF Staff Country Reports
- Title: Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Capital Markets Union-Implications for Supervision and Institutional Arrangements
- Date: July 25, 2025
- Pages: 31
- Volume: 2025
- Issue: 214
- Series: Country Report No. 2025/214
- DOI: https://doi.org/10.5089/9798229019880.002
- Stock No: 1EUREA2025011
- ISBN: 9798229019880
- ISSN: 1934-7685
- Subjects: Asset and liability management; Asset management; Capital markets; Financial markets; Financial Sector Assessment Program; Financial sector policy and analysis; Financial sector stability
- Keywords: A. EU; Asset management; Capital markets; CMU initiative; D. CMU; EA capital markets; EU Member State equity markets; Europe; Financial Sector Assessment Program; Financial sector stability; FSAP finding
International Monetary Fund. Monetary and Capital Markets Department "Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Capital Markets Union-Implications for Supervision and Institutional Arrangements", IMF Staff Country Reports 2025, 214 (2025).
Content in this bundle
- 1eurea2025011