European economies have benefited from an unprecedented amount of funding from capital markets to support the economic recovery after COVID-19, according to the latest research by the Association for Financial Markets in Europe (AFME). The paper published today (14 July) revealed the recovery is being led by record issuance levels of investment grade securities and ESG bonds. The report analysed the impact of COVID-19 on European capital markets during the four months since the World Health Organisation declared COVID-19 a global pandemic.
Commenting on the report, Julio Suarez, Director of Research at AFME, said:
“During these exceptional times, European capital markets have demonstrated their ability to support economic recovery and future growth. Europe has seen a record amount of funding from capital markets instruments, predominantly fixed income securities. Our research also shows that Europe has the potential to lead an ESG recovery, with European social bond issuance reaching their highest quarterly volume to date. Listed SMEs across the continent have also benefited from access to equity capital and from record volumes of bank lending.”
AFME CEO Adam Farkas added:
“AFME has been working with its members and regulators across Europe to ensure that markets remain well-functioning and liquid in light of the market impact of COVID-19 while at the same time acknowledging the extraordinary support measures extended by central banks and fiscal authorities.
“Our report shows that banks and capital markets are playing a key role in supporting the economy during this challenging period. To ensure a robust post-pandemic recovery it is important to advance the Capital Markets Union project in the EU and promote regulatory measures that improve the efficiency and functioning of European financial markets. We are keen to maintain dialogue with policy makers to ensure the industry is well placed to continue supporting European growth.”
The report follows from AFME’s research on the initial impact of COVID-19 on Europe’s capital markets and summarises AFME’s approach to COVID-19 and the areas the association has been focusing on to ensure that markets remain well-functioning and liquid in light of the recent impact of the coronavirus.
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