Fireworks illuminate the sky around a huge euro sculpture in front of the headquarters of the European Central Bank in Frankfurt.
Courtesy Reuters

The European Central Bank’s recently released stress test results aim to clean up the eurozone’s banks before the launch of Europe’s vaunted banking union. But Jean-Claude Juncker, the newly inaugurated European Commission president, has set a different financial priority for his first five-year term, one that has received decidedly less attention: the creation of a European capital markets union. 

It is not yet clear what this project means or how it would benefit the EU. To a large extent, Juncker’s capital markets union is still a slogan in search of a policy program. But it is easy to imagine a set of initiatives designed to help Europe develop healthy nonbank sources of finance and to let capital flow freely across the continent’s national boundaries. If so, it could be hugely beneficial for Europe.


Europe needs nonbank finance because its banks—which

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  • HUGO DIXON is Editor-at-Large, Reuters News, and founder of Reuters’ Breakingviews. This article draws heavily on “Unlocking Europe’s Capital Markets Union,” written for the Centre for European Reform in October 2014.
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