ECB/Lagarde: It's Time to Accelerate Efforts to Unite the EU's Fragmented Financial Infrastructure

Forex - European Central Bank President Christine Lagarde stated in an article she wrote for the Economist that the European Union needs to accelerate its efforts to unify its fragmented financial infrastructure. In her piece on the ECB website, Lagarde mentioned, "The EU has spent years trying to build a 'capital markets union.' Since 2015, there have been over 55 regulatory proposals and more than 50 non-legislative initiatives. However, a broad agenda has resulted in very little progress. Europe needs to refocus by uncovering key bottlenecks in the funding pipeline and identifying fewer solutions that will yield the highest returns."

Lagarde emphasized three points in her commentary published on the ECB's website: European savings are not entering capital markets in sufficient amounts; when savings do reach capital markets, they are not expanding across Europe; and once savings are allocated by capital markets, they are not directed toward innovative companies and sectors.

Lagarde wrote, "Progress in these three areas will be self-reinforcing. More high-growth companies will mean higher valuations, more liquidity in the EU markets, and higher returns for savers. However, this will require a shift in approach from many small steps to a few large steps, selecting those that are the most feasible and will create the greatest difference."