The European Capital Markets Union provides an opportunity to deepen financial market integration and to enhance the resilience of the European financial system (European Commission 2015, 2017; Deutsche Bundesbank 2015a). Cross-border debt flows tend to be more stable than equity flows and in particular foreign direct investment.
The crisis has been a stark reminder of how interconnected the world financial system and economy has become. Financial sectors have also become more interconnected. While most comment has concentrated on the role that the Lehman bankruptcy played in worsening the crisis, we should not forget that the events surrounding AIG also had an impact on global financial markets.