Investment Banking

Right aim, wrong approach on bond standardisation

Banks responding to Europe's Capital Markets Union plan agree that liquidity is a worry but say standardisation is no solution

Lord Hill
Lord Hill Photo: Getty Images

Debate over the merits and drawbacks of standardising bond issues has been reignited in banks’ recently published responses to the European Commission’s plans for a Capital Markets Union.

In its February green paper on the EU-wide initiative, the Commission noted that standardisation could be used as "a mechanism to kick start markets". A certain degree "may attract more investors and increase market depth and liquidity", it said, which could work to the benefit of smaller member states lacking domestic capital.

WSJ Logo
U.S.’s Biggest Asian Allies Ready Last-Ditch Trade Appeal to TrumpExternal link

U.S.’s Biggest Asian Allies Ready Last-Ditch Trade Appeal to Trump