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EU capital markets are underdeveloped compared to those in the US. European banks are too small, and mostly national. More importantly, the marketplaces are too
by tormeh 8y ago
EU capital markets are underdeveloped compared to those in the US. European banks are too small, and mostly national. More importantly, the marketplaces are too small and too national. European stock exchanges are a joke compared to NASDAQ and NYSE.
There's also the small detail of pension funds generally being forbidden from investing in stocks. That's the money that's fuelling SV, if my impression is correct. This policy comes from a general risk-aversion that's also evident in all other areas.
- Aethelwulf 8y ago> There's also the small detail of pension funds generally being forbidden from investing in stocks. Do you have a source for that? I've not heard that before.
- raverbashing 8y ago> European banks are too small, and mostly national. You mean like Deutsche Bank? BNP Paribas? Santander?
- tormeh 8y agoYes, like those. They are big on a European scale, but not internationally. I think Deutsche used to be pretty big, but it's been going downhill for a couple of years now.
- raverbashing 8y agohttps://www.investopedia.com/articles/investing/122315/worlds-top-10-banks-jpm-wfc.asp https://www.investopedia.com/articles/investing/122315/world... This is more up to date but it seems you're right about Deutsche Bank https://www.forbes.com/sites/antoinegara/2018/06/06/forbes-global-2000-the-worlds-largest-banks/ https://www.forbes.com/sites/antoinegara/2018/06/06/forbes-g...
- fastbeef 8y ago"There's also the small detail of pension funds generally being forbidden from investing in stocks." Could you provide more info? All my Swedish pensions savings, both private and goverment, are basically stocks-only funds.
- ionised 8y agoNone of this seems correct. Europe has more than a few multi-national, global banks. Also, my own pension is invested in the stock market. That's the norm for employer-provided pensions.
- athrun 8y agoThis article from The Economist touches on this topic. “Banks cannot use deposits in one country to lend in another, because national regulators do not want to be on the hook for loans to improvident foreigners. An eu-wide deposit-guarantee scheme would allay that fear, but has yet to be agreed.” https://www.economist.com/briefing/2019/01/05/the-euro-enters-its-third-decade-in-need-of-reform https://www.economist.com/briefing/2019/01/05/the-euro-enter...
- vesinisa 8y ago> There's also the small detail of pension funds generally being forbidden from investing in stocks. As someone who has worked for a Finnish start-up financed by a pension fund, you are mistaken on this one.