This serves as a buffer against losses and as a private sector risk sharing mechanism. While stock markets in the EU are already well integrated, there are other market segments in which reforms could be beneficial. For instance, removing institutional barriers to mergers and acquisitions could spur crossborder equity investments.
This may include limiting discretionary power in the implementation of the European Takeover Directive or legal options available to national governments to block M&A transactions. It may also include reviewing to what extent corporate governance rules affect incentives for M&As.