Dossier
Capital Markets
Keeping Europe competitive: Strengthening European capital markets and revitalising the securitisation market
Europe is facing growing economic, demographic and geopolitical pressure, and must strengthen its resilience and overcome its persistent weak growth. Banks and capital markets have a central role to play in this. The Association of German Banks therefore advocates an integrated, efficient and globally competitive European capital market that delivers on the promise of a genuine Savings and Investment Union (SIU).
Key points at a glance
A competitive capital market:
- Mobilises private capital at scale
- Enables efficient, cross-border investments and transactions
- Offers attractive financing conditions as well as suitable products and services
- Ensures fair pricing at all times through its depth and liquidity
- Strengthens innovation, growth and economic resilience
This requires:
- Simple and proportionate regulation that allows competition to flourish
- High levels of liquidity and market integration
- A clear division of roles between strong banks and efficient market infrastructures
- An appropriate balance between stability, integrity and liquidity
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Where do we stand?
2026 will be a pivotal year for Europe.
Competitiveness is the foundation of Europe’s sovereignty
It underpins the ability to defend ourselves, to expand modern infrastructure, to drive the digital transformation and transition to a sustainable economy. The investment required is enormous and calls for a financial system capable of providing the necessary funding, both for Europe and for Germany. Strong banks and a well-functioning capital market are therefore indispensable.
Banks and capital markets have a central role to play
They finance investments, innovation and growth while ensuring capital is allocated efficiently. At the same time, the European capital market is not fully harnessing its potential and strengths. It remains fragmented, is less liquid than comparable international markets, and is burdened by complex and, in some cases, inconsistent regulation. This makes cross-border investment more difficult and prevents sufficient private capital from being mobilised.
In order to ensure that Europe does not lag behind other major economies, the right conditions must be created to enable the capital markets to deliver on their key role of promoting growth, innovation and prosperity. Only then will Europe attract international investors and their capital.
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What the Association of German Banks is calling for
The goal is an integrated, efficient and globally competitive European capital market that delivers on the promise of a genuine Savings and Investment Union (SIU).
Measures at European level
Streamline and simplify regulation
Modernise market structures and processesregulation
Advance market integration
Increase capital market depth through a strong securitisation market
Strengthen innovation
Measures at national level
Create a competitive tax environment
Expand capital-market-based retirement provision
Develop a growth capital market
Strengthen financial education
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FAQ
A competitive capital market makes it easier for businesses to access capital for investment, innovation and growth. It mobilises private capital, promotes cross-border investment and makes Europe more attractive to international investors. This helps secure funding for key priorities such as digitalisation, infrastructure, defence and the transformation of the economy.
The Savings and Investment Union (SIU) is a European Union initiative aimed at channelling more savings into productive investment. Its goal is an integrated European capital market that facilitates cross-border investment, improves access to finance for businesses and strengthens Europe’s competitiveness.
Capital markets enable businesses to raise long-term funding through shares and bonds. This allows them to invest, drive innovation and create jobs. Fast-growing companies, in particular, benefit from having additional sources of finance alongside traditional bank lending.
Securitisations pool loans, such as mortgage loans or corporate loans, and turn them into tradable securities. This enables banks to distribute risk and free up capital for additional lending. A well-functioning securitisation market can help support financing for the real economy.
A strong securitisation market creates additional financing opportunities for businesses and households. It enables banks to use their capital more efficiently and grant new loans. This requires transparent and robust rules that build trust and keep risks within appropriate limits.
No, banks and capital markets complement one another. Banks primarily finance businesses through loans, while capital markets provide access to funding through shares and bonds. Together, they help ensure that businesses and investors can find financing solutions that meet their needs and that sufficient capital is available for investment.
Europe can mobilise more private capital by making investment both more attractive and easier. This requires an integrated European capital market, fewer cross-border barriers, a strong securitisation market and incentives for private investors. Greater use of capital-market-based retirement provision and stronger financial education can also help channel more savings into productive investment.
The Association advocates an integrated, efficient and internationally competitive European capital market. Key reforms include simpler and proportionate regulation, modern market infrastructures, the removal of cross-border barriers and a strong securitisation market.
Briefing paper
Paper capital markets
Unsere Ansprechpersonen zum Thema Kapitalmärkte
Miye Kohlhase
Member of the Executive Board
Dr. Hendrik Hartenstein
Head of Corporate Finance