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European exchange landscape: too fragmented

May 2, 2016
Region:
In September 2015, the European Commission set out its action plan to establish a Capital Markets Union in order to push for stronger and more integrated capital markets in the EU to better complement bank finance. Creating deeper and more liquid stock markets is crucial in this respect, and also a precondition for European financial centres to regain their position in a global context. Indeed, the total number of stock exchanges operating independently in the EU is astonishingly high, especially in eastern and south-eastern European countries. In addition, market capitalisation is highly concentrated in only a handful of exchanges, and in smaller markets also tends to be lower relative to economic size. [more]

More documents about "Banking and financial markets"

190 (133-144)
July 9, 2014
Region:
133
The transatlantic integration of financial markets has suffered a serious setback since the crisis of 2007. Since then, the countries affected have fundamentally overhauled the regulatory framework governing financial markets. However, this stricter regulation has led to regulatory divergence: Divergent rules on capital, liquidity, derivatives and banking structures are threatening to fragment the financial markets. Slightly divergent national policy preferences, the institutional framework and the relevant partners' differing ideas on reform have been the main factors driving this unfortunate trend. The proposed Transatlantic Trade and Investment Partnership (TTIP) provides a good opportunity to lay strong institutional foundations for regulatory cooperation on financial services as well. Responsibility for creating internationally harmonised rules on financial market regulation rests with the G20 leaders. [more]
June 25, 2014
Region:
134
Current results are still very weak, with total revenues and profits both at the lowest level since 2009. But the largest European banks can justifiably draw hope from a stabilisation in interest income as well as fees and commissions, from declining loan loss provisions and shrinking expenses. The bottom line may have broadly bottomed out, though pressure from litigation charges and the ECB’s balance sheet assessment remains high. New record capital levels abound. [more]
May 23, 2014
Region:
135
From the standpoint of potential company founders, an inadequate supply of funding is a key issue especially in a start-up's early phases. Therefore, we welcome the efforts of the crowdfunding movement from an economic perspective, particularly with regard to growth. However, there is an urgent need for action aimed at eliminating the existing information asymmetries and conflicts of interest between company founders, funding platforms and investors. [more]
April 15, 2014
Region:
136
In our empirical analysis we investigate the substitution between weak bank lending and lush bond markets and we show that rising bank CDS spreads are consistently associated with positive growth in securities underwriting and negative growth in loan syndication. This suggests that banks and clients switch funding instruments in times of financial stress. In this regard, a well-developed bond market is an important element to increase financial resilience as it offers an alternative source of funding for the real economy and an alternative source of revenue to banks. However, we also note a worrying trend towards financial fragmentation during times of stress which limits diversification potential. [more]
April 1, 2014
Region:
137
The fundamental transformation of the European banking sector into a leaner, less profitable, low-growth but also more stable industry in the “new normal” continues to make progress. Banks are shedding assets, reducing costs and raising capital ratios, with revenues in 2013 having declined for the third consecutive year. Legacy assets and litigation remained an additional, significant burden. Nonetheless, profitability has improved somewhat from its extremely low levels and may well rise further this year. [more]
January 31, 2014
138
Corporate bond markets in Asia have expanded rapidly. Since the global financial crisis, Asian corporates have made increasing use of bond issuance for their funding needs, complementing traditional channels such as bank lending. While the bond markets of Hong Kong, Singapore and Korea are comparatively advanced and liquid, markets in China, India, Indonesia and Thailand are still at an early stage of development. Considerable variation exists in terms of bond issuances' structural characteristics by sector, currency, issuing volume and the use of funds. Fast growth in bond markets has provided an effective source of financing for the corporate sector, but its development is far from complete. [more]
December 16, 2013
Region:
139
Following years of struggle and having seen their world turned upside down, European banks may finally be heading for a (somewhat) smoother ride in 2014. Profitability is returning, though so far this is mainly driven by lower extraordinary charges rather than improvements in revenues and costs. Pressure to build capital may lessen thanks to significant progress over the past two years, yet currently banks are still shrinking relentlessly. Much will also depend on regulatory and supervisory actions, especially on how the EU Banking Union is implemented. [more]
December 5, 2013
Region:
Analyst:
140
The findings of our study show that in both the periods before and after the Lehman collapse higher liquidity and lower risk aversion go hand in hand with lower yield spreads between federal bonds and Länder bonds. With regard to the influence of fundamental macroeconomic and fiscal variables on the yield spread there are, however, differences between the periods before and after the Lehman collapse. Up until the Lehman collapse neither the debt level nor the relative economic output had a significant impact on the size of the yield spread. Like in the European bond market, however, the economic output and the debt levels of the Länder have been major determinants of the yield spread since 2008 – despite (implicit) joint liability of the different levels of government. [more]
November 26, 2013
Region:
141
The EU Commission's stated aim of increasing the industrial sector's share of gross value added in the European Union to 20% by 2020 is extremely ambitious and, in our view, cannot be achieved in the foreseeable future. Nonetheless, it sends out the right political signal that Europe is to be strengthened as an industrial location. Rather than focusing on purely industry-specific measures, the attainment of this goal will ultimately require supportive conditions for companies – those from both the industrial and service sectors – to ensure that they can compete against non-European rivals. This in turn will necessitate investment in education, research and infrastructure as well as a benign investment climate, affordable energy prices and intelligent regulation. [more]
November 11, 2013
Analyst:
142
Among the agreed derivatives market reforms, the central clearing of OTC derivatives contracts has a pivotal role that changes the existing risk management and collateralisation practices tremendously. Nevertheless, to date, there is little empirical evidence on the impact of the new market infrastructure on CDS spreads. Controlling for a number of factors, our results indicate that the costs of central clearing seem to be passed on to end-users in the form of increased CDS spreads. [more]
October 31, 2013
Region:
143
Is the Single European Market a success story? 20 years after it was established the question can largely be answered in the affirmative. The high and in part too optimistic expectations have not all been fulfilled. Nevertheless, the Single Market has resulted in increased competition, higher exports and more foreign direct investment. Overall, positive effects on GDP can be confirmed, albeit not on the scale anticipated by some. Given the structural problems in the eurozone and Europe's long-term dwindling importance for the global economy the continuing development of the Single Market is one absolutely essential element if Europe wants to maintain its economic strength. [more]
September 26, 2013
144
Five years after the global financial crisis hit both the US and Europe, banks across the Atlantic are in very different shapes. US banks have returned to record profit levels, while their European peers are struggling to stay above the zero line at all. The differences are mainly driven by diverging trends in revenues, corporate lending growth and loan loss provisions all of which have developed much more favourably in America than in Europe. This may have been caused largely by three underlying factors: i) the better macroeconomic performance of the US, ii) European banks' less aggressive dealing with problematic legacy assets and their greater need to deleverage and shrink, and iii) differences in the institutional setup - in Europe at times triggering doubts over the very survival of the Monetary Union, in the US allowing the Fed to massively intervene in financial markets. As the US economic recovery gains strength and Europe emerges from the debt crisis and recession, banks face improvements on an operating level, with EU financial institutions likely to narrow but not close the gap to their US competitors. [more]
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