It is not clear whether the apparent weakness of the European venture capital sector is caused by (1) a lack of capital supplied, perhaps reflecting lack of liquidity in still somewhat nationally segmented venture capital markets, (2) legal, regulatory and tax barriers, or (3) a shortage of viable exit options for venture capitalists through liquid specialised equity markets. 5.
Implications for central banks  From the point of view of central banks, developments in the financial sector have a special role that distinguishes them from other services.