IDEAS home Printed from https://ideas.repec.org/p/imf/imfsdn/2026-002.html

Deeper and More Integrated Financial Markets to Foster Growth and Resilience in Europe

Author

Listed:
  • Mr. Luis Brandão-Marques
  • Mr. Damien Capelle
  • Mr. Diego A. Cerdeiro
  • Adriano Fernandes
  • Alexandra Fotiou
  • Yueling Huang
  • Claire Li
  • Rui Mano
  • Mr. Alberto Musso
  • Ese Onokpasa
  • Mr. Richard Varghese
  • Maryam Vaziri

Abstract

Persistent fragmentation and limited depth in EU financial markets constrain firm growth, innovation, and cross-country risk sharing. This Staff Discussion Note documents policy-induced barriers that impede cross-border bank lending and suppress the scale of venture capital, alongside broader real-sector frictions that restrict the amount of investable projects. Obstacles examined in the Note include heterogeneity in banking regulation and safety nets (notably deposit insurance), as well as insolvency regimes, and rules limiting the provision and allocation of risk capital by pension funds and insurers. Financial reforms could raise long-run EU GDP by about 3 percent, with two-thirds from deeper banking integration and the remainder from reducing cross-border barriers to and expanding the supply of risk-capital. In addition, these financial reforms would magnify by an additional percentage point of GDP the gains from a broader set of domestic structural reforms that improve business dynamism and innovation. Smaller EU economies and younger firms benefit disproportionately.

Suggested Citation

  • Mr. Luis Brandão-Marques & Mr. Damien Capelle & Mr. Diego A. Cerdeiro & Adriano Fernandes & Alexandra Fotiou & Yueling Huang & Claire Li & Rui Mano & Mr. Alberto Musso & Ese Onokpasa & Mr. Richard Var, 2026. "Deeper and More Integrated Financial Markets to Foster Growth and Resilience in Europe," IMF Staff Discussion Notes 2026/002, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2026/002
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=576494
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfsdn:2026/002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.