Europe has spent a quarter of a century building a financial architecture that it has never fully agreed to complete. Significant progress towards a unified system was made with the introduction of the Euro in 1999, the single banking supervision in 2014 and a single resolution mechanism in 2015. Less progress was made integrating capital markets. The Capital Markets Union initiative was first launched in 2015, relaunched in 2020, and then rebranded as the Savings and Investments Union in 2025. However, it remains a programme rather than an integrated market. The pieces in the European financial architecture that were built are real and they work. The aspects that were left out — a single insolvency logic, deep pools of capital, a common safe asset and a unified post-trade layer, a common deposit guarantee — are precisely the pieces that would have made the financial system behave as a union rather than as a coordinated collection of national systems.
The paper, "Completing Capital Markets Union and Banking Union in the Digital Age," is part of CEPR's Europe 2050 series and was first published here: cepr.org/publications/completing-capital-markets-union-and-banking-union-digital-age
