An unhappy anniversary for the Capital Markets Union
2024 marks the 10th anniversary of the European Commission’s ambitious Capital Markets Union (CMU) project, aimed at unifying the EU’s financial markets and boosting cross-border capital flows. However, senior German asset management professionals expressed disappointment over the initiative’s progress.
Speaking at a Funds Europe roundtable in Frankfurt during the summer, Dirk Degenhardt, CEO of Deka Wealth Management, emphasised the lack of global competitiveness resulting from increased regulations. “The CMU should have helped the EU become more competitive, but instead we’ve seen more bureaucracy. This has cost the EU, particularly in comparison to the US.”
Dr. Matthias Liermann, global head of product management at DWS, echoed this sentiment. “We can’t get any scale in there at all. European financial market activity has dropped from 18% to 10% of global share.”
Ingo Mainert, chief investment officer at Allianz Global Investors, criticised the top-down approach of the CMU. “The CMU was like building castles in the air—esoteric and not grounded. The project needs to start from individual member states identifying their best practices.”
The roundtable discussion, which also included Hans Joachim Reinke of Union Investment and Thomas Richter of BVI, explored the need for cultural shifts and greater private sector involvement. While some, like Richter, believe momentum may return due to changing economic circumstances, others remain sceptical.
The CMU, once seen as a unifying force for European capital markets, continues to face challenges, with calls for a more localised, bottom-up approach from stakeholders, our panel heard.
Read a full report of the discussion – which also covers private markets and sustainable investing – here.
