European Central Bank (ECB) President Christine Lagarde said on Friday that the European Union, "as the most open of the major economies," is more exposed to growing threats to free trade than other economies. She insisted the capital markets union is "key for making our economy more dynamic and technologically advanced" but that there is a lack of progress in implementing it.
Lagarde said savings by EU households are not entering capital markets in sufficient volumes "because they are concentrated in low-yielding deposits." She also pointed out that savings that reach capital markets are then often "trapped within national borders" with 60% of households’ investment happening in their own countries, or else they end up in the United States. Finally, she noted that, once savings have been allocated by capital markets, "they are not exiting towards innovative companies and sectors owing to an underdeveloped ecosystem for venture capital."
