author={Jesper Berg and Laurent Clerc and Olivier Garnier and Erik Nielsen and Natacha Valla},
title={From the Investment Plan to the Capital Markets Union: European Financial Structure and Cross Border Risk-sharing},
type={Working Papers},
abstract={Following the financial crisis, Europe is suffering from a significant investment deficit. It has long been appreciated that growth will suffer in Europe over the medium term unless the shortfall in investment is addressed, but considerable disagreement on how to achieve this, and in particular on the role public investment should play. In addition, mobilising finance to increase investment in Europe requires both a good understanding of Europe’s financial structure, and a fine knowledge of the composition of cross-border financial imbalances. In this paper, we take stock of the state of play regarding investment, financial structures and cross-border imbalances. We contend that any initiative meant to provide a sound basis for long-term, stable investment flows has to acknowledge the fact that Europe is engaged in a debt-deflation deleveraging phase, with accompanying disintermediation, the full extent of which is as yet unknown. We then draw policy conclusions that would allow for a sustainable investment revival, insisting on the need to have an overall strategic vision for the main EU policy initiatives - the Investment Plan, the Capital Markets Union, and the €1,100bn new money issued by the ECB within its Large Asset Purchase Programme. },
keywords={ECB ; Capital Markets Union ; Policy Srategy ; Securitization ; Covered Bonds}