There is currently huge concern that the Capital Markets Union (CMU) project has lost its way. Some argue that without cross-border banking consolidation, the large European banks needed to drive CMU will not emerge. The growth in regulation since the financial crisis and the purely national focus of many regulators mitigates against banking consolidation.
Financial commentator Huw van Steenis recently pointed out that, in the absence of CMU, care will be needed in winding down the European Central Bank’s bank lending schemes aimed at small and medium-sized enterprises (SMEs), if smaller companies are not to be left high and dry for funds.
