Competitive capital markets

Where do we stand?

2026 will be a pivotal year for Europe. 

Europe is facing growing economic, demographic and geopolitical pressure. It must strengthen its resilience and permanently overcome the current period of weak growth. The next few months will play a decisive role in determining whether or not Europe will be able to secure, over the long-term, its economic and political agency.

Remaining competitive is key for Europe’s sovereignty. 

If Europe is to defend itself, produce modern infrastructure, master the digital transformation and manage the transition to a sustainable economy, it must remain competitive. This will require investment on a massive scale and a financial system that can provide the capital to achieve these goals – for Europe and for Germany. Strong banks and powerful capital markets are therefore vital.

Banks and capital markets play a key role. 

They finance investments, innovation and growth, and ensure that capital is allocated efficiently. However, the European capital market is not making full use of its potential and capabilities. It is fragmented, has less liquidity than comparable international markets and is burdened by complex regulations that is often inconsistent. This makes cross-border investments more difficult and impedes the mobilisation of adequate amounts of private capital.

In order to ensure that Europe does not lag behind other economic areas, framework conditions must be designed to ensure that the capital market can take on its key role of promoting growth and innovation and securing prosperity. Only then will Europe realise its true potential and attract international investors and their capital.

Where are we trying to get to?

The aim is an integrated, efficient, European capital market capable of competing on the global stage, one that truly functions as a Savings and Investments Union (SIU).

A capital market of this kind would:

• mobilise large amounts of private capital
• enable efficient, cross-border investments and transactions
• offer attractive financing conditions to businesses and suitable products and services to investors
• have enough depth and liquidity to facilitate fair pricing at all times
• strengthen innovation, improve growth and guarantee economic resilience

and requires:

• simple and proportionate regulations that encourage market competition
• high liquidity and market integration 
• a clear division of roles between high-performing banks and efficient market infrastructures 
• an appropriate balance between stability, integrity and liquidity – this is the only way to ensure competitiveness