We need a capital markets union to get SMEs the finance they need, says ex-banker » SMEInsider

We need a capital markets union to get SMEs the finance they need, says ex-banker

The EU gets a bad rap when it comes to making business easier, but a new concept coming out of Brussels will help SMEs to scale up fast, according to Guy Dawson.

The finance expert and member of the advisory council of Business for New Europe is calling for the UK to support the idea of a capital markets union, which he says will “beef up” non-bank sources of finance including venture capitalists, pension funds and stock markets.

At present, just 2% of funding for UK SMEs comes from venture capitalists, compared to 14% in the US.

Dawson describes a capital markets union as a means of “allowing capital to flow across borders capital to flow across borders, breaking down barriers within countries and diversifying sources of funding.” He envisages this as being centred in the City of London, but supplying funding to startups and SMEs all across Europe.

Writing in CityAM, Dawson said: “UK financial services could provide the funding for businesses and investment projects across £10 trillion market – a move potentially as transformational as the Big Bang in 1986.

“This is not something that can be replicated outside the EU. What would give capital markets union its power is the sheer scale of the European market”