A Post-Brexit Opportunity Europe Shouldn't Miss
His hands were tied.
Photographer: Dursun Aydemir/Anadolu Agency/Getty ImagesIf there is a silver lining for the world of finance from the Brexit vote it is this: that the departure of Britain offers the European Union a chance to complete much-needed reforms to the Continent’s lagging capital markets. If it can do that, the EU might just be able to demonstrate its ability to enhance growth across its member states.
Two years ago, European Commission President Jean-Claude Juncker made strengthening Europe’s capital markets one of his key priorities. Europe lagged America across the board: in public and private equity financing, bond issuance by medium-sized companies, securitization, corporate transparency, and the ability to work out debt in a downturn. Bank loans represent more than three-quarters of external credit to non-financial companies in the EU, against less than a third in the U.S. Europe’s small- and mid-sized firms, especially those with a high growth potential, needed better access to financing options.