CEE Special | Challenge no.9 Capital markets

CEE Economies Special Report , 17. Dec
Capital markets report is the ninth report from the series titled “CEE – 10 challenges for the new decade”. Capital markets are pretty small in CEE, and are also split along national borders. The low share of capital market financing leaves companies in the region without an important source of funding diversification. It also means that not as many investment options are available to savers as in Western Europe, or the US. The lack of investment options makes it more difficult to reach individual investment goals, i.e. saving for retirement. Deeper and more integrated capital markets could improve the shock-absorbing capacity of regional economies in case of a sudden economic downturn too.

Besides the Capital Markets Union initiative on an EU level, regional countries could foster their capital markets by improving market access and enhancing market efficiency. Improving financial literacy, incentivizing security issuance or strengthening the role of pension funds would also be helpful.