Capital markets in country B would thus benefit from a larger number of available providers and products. The cross-border holdings of capital market instruments would increase. The integration of capital markets could also be accelerated by cross-border mergers of banks.
Cross-border banks have an inherent interest in driving forward the permeability of national capital markets as they could benefit from scale-effects by reaping cross border efficiency potential. For the banking system to become more resilient and more integrated and hence support the resilience and integration of capital markets, we need to complete banking union.