François Villeroy de Galhau: From a capital markets union to a genuine financing union for transition

Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Eurofi High Level Seminar, Ghent, 23 February 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
26 February 2024
by François Villeroy de Galhau

Slides accompanying the speech 

Ladies and Gentlemen,

It is a great pleasure to be here today, and I extend my warmest thanks to David Wright, Didier Cahen and Eurofi's team for organising this event in this architectural jewel of the city of Ghent. The focus of my speech today will be on the Capital Markets Union (CMU). Some may think that this theme it is a bit too familiar, with the same tired messages. But this time is different.

The Capital Markets Union has long been seen as the Ugly Duckling, sparking little public interest, and lacking political ownership. The reasons for this are well known: the CMU involves a myriad of technical measures, relating to a wide number of sectors – the financial sphere, as well as corporate legislation and capital taxation. The Commission has nonetheless worked tirelessly on the 2015 and 2020 action plans and accomplished massive progress, albeit underestimated: no less than 33 out of 36 measures have been implemented or are underway. Nevertheless, Europe remains far below its potential in terms of financial power relative to its economic and demographic power (slide 2). 

In line with this insufficient dynamism, the EU's share in the global volume of financial transactions almost halved between 2006 and 2022. But a window of opportunity has recently opened with Christine Lagarde's push for a "Kantian shift". In France, the Minister for Economic Affairs Bruno Le Maire launched a taskforce led by my predecessor Christian Noyer, to make "tangible recommendations". I don't want to preclude their conclusions and the views I share this morning are mine. But I couldn't agree more with one conviction: we should go beyond the "CMU fatigue" – which is real –, and scale up our "CMU ambition". To change gear, I am calling today for a higher purpose (I) and for broader instruments (II).