Second, the Capital Markets Union (CMU) agenda now takes on greater urgency, in order to enable deeper and more liquid markets in euro-denominated instruments. This is essential if the euro area is to reap the benefits from a more balanced financial system, in which equity and bond markets offer an alternative to banks in intermediating funds between savers and investors.
The CMU agenda is quite demanding in terms of the range of the individual components, such that it will require considerable commitment among policymakers to make sustained progress. Third, in any new long-term relationship between the UK and the EU, it is quite likely that there will be very extensive ongoing UK-EU trade in financial services, with associated high levels of bilateral financial flows.