A genuine Capital Markets Union can be promoted through legislative changes that impose harmonization towards best practices on securitization, accounting, insolvency and corporate law, property rights etc. Such changes will allow for deeper integration of bond and equity markets and will ensure that companies (and in particular SMEs) can gain access to capital markets on top of bank funding.
In fact, we experienced a serious financial system crisis in 1997 and 1998 characterized by a large-scale credit crunch and the financial sector exerting strong downward pressure on economic activity. Thus, it is extremely important to incorporate the assessment of financial system into economic outlooks. This is one reason we believe that the economic recovery is more likely to be moderate rather than robust.