Here, it is mainly credit markets that cushion economic shocks – and they are not very effective in doing so. Altogether, only around 40% of a given shock is absorbed before it can affect consumption.
Increasing the share of capital markets  BIS central bankers’ speeches  3  and integrating them across borders would therefore help improve risk sharing in Europe and reduce the volatility of consumption. To be sure, the argument for a capital markets union is straightforward, but implementation will be much less so. The capital markets union is a complex undertaking affecting many different areas.