THE CAPITAL MARKETS UNION (CMU): INTEGRATION, IMPACTS, AND STRATEGIC IMPLICATIONS FOR THE EUROPEAN UNION Navigating National Interests: The Role of Regulators in the Capital Markets Union Reforms

Abstract

The primary aim of this study is to analyze the role of national regulators in the context of Capital Markets Union (CMU) reforms and to assess the challenges and opportunities presented by the initiative from an interdisciplinary perspective. We ask: To what extent has the CMU reduced financial fragmentation within the European Union? Has the CMU improved access to finance for SMEs? Can the CMU strengthen Eurozone resilience through private risksharing mechanisms? The findings indicate that while the CMU has the potential to enhance financial stability and access to finance, its implementation faces several challenges. Regulatory fragmentation arises from differences in national regulations and insolvency laws, creating barriers to deeper integration. National sovereignty concerns lead regulators to resist ceding authority to supranational bodies, prioritizing domestic stability. The success of CMU reforms depends on the ability of policymakers to navigate competing national interests and foster cooperation among member states. The CMU is a critical step towards a more integrated European financial system. However, its success will depend on addressing the challenges posed by national regulators and regulatory fragmentation. Policymakers must balance financial integration with national sovereignty to realize the full potential of the CMU.