Fundraising in the markets fell sharply in the first half

The financing obtained by companies in the European financial markets fell sharply, below its pre-Covid level in the first half of the year after a record year in 2021 according to a report published this Thursday, which revives the debate on the union of capital markets.

The war in Ukraine, high inflation, tightening of central bank monetary policies and fears of recession have worsened financial conditions in European corporate markets.

“Socioeconomic and geopolitical developments have caused a significant setback in capital market activity in 2022, as market funding levels reached record gains in the previous two years,” explains the report from the Association of Financial Markets of Europe. (AFME).

According to this association, which brings together the largest financial institutions on the continent, the financing share of the European Union markets for companies reached 9.4% in the first half of 2022, compared to 14.1% in 2021, where record volumes had been registered, and 11.3% in 2019.

A share of 9.4% compared to 14.1% the previous year

In total, the number of debt and equity issuances in the first half of 2022 fell 32% in the markets compared to last year.

The association takes advantage of these figures to defend a sea serpent that has been talked about since 2014: “the Capital Markets Union project continues to be essential to accelerate the financing of the economy”, says Adam Farkas, general director of the AFME, quoted in the press release.

The Union of Capital Markets (UMC) is a single European capital market project aimed at promoting its circulation among member countries to finance companies more broadly and especially start-ups and SMEs.

Its construction suffers from “lack of progress” according to the AFME.

In a column published this Monday, the governor of the Banque de France and the president of the Deutsche Bundesbank recalled the urgency “of a true union of capital markets” in Europe where the crisis “of the Russian war in Ukraine, energy, inflation” overwhelm the business environment.