Christine Lagarde: Follow the money - channelling savings into investment and innovation in Europe
Speech by Ms Christine Lagarde, President of the European Central Bank, at the 34th European Banking Congress "Out of the Comfort Zone: Europe and the New World Order", Frankfurt am Main, 22 November 2024.
The views expressed in this speech are those of the speaker and not the view of the BIS.
At last year's conference, I spoke about Europe's fragmented capital markets and the urgent need for us to integrate them.
The main thrust of my argument was that Europe was facing transformative changes that came with huge financing needs, and that we would not succeed without mobilising private capital much more effectively.
I called for a "Kantian shift" in how we approach the capital markets union (CMU) project, moving away from bottom-up harmonisation to top-down integration.
But as Martin Luther King said, "we are now faced with the fact that tomorrow is today." And in that time, the urgency to integrate our capital markets has risen.
Since last year, Europe's declining innovation position has come more clearly to light. The technology gap between the United States and Europe is now unmistakeable.
The geopolitical environment has also become less favourable, with growing threats to free trade from all corners of the world. As the most open of the major economies, the EU is more exposed to these trends than others.
CMU lies at the centre of all these challenges.
It is key for making our economy more dynamic and technologically advanced. While banks play an essential role in the European economy, we know that integrated capital markets are needed for financing early-stage, breakthrough innovation.