“Banks are the dominant provider of credit to companies in Europe, yet loans will hardly satisfy the needs. Markets could provide more funding, as a comparison with the US shows. Concluding our mini-series on European capital markets, in this note we will shed light on the role of debt securities. Debt securities issued by non-financial corporations in the EU amount to EUR 2 trillion (Q2 2024), of which EUR 1.7 tr is in the euro area. Here, market growth accelerated with the onset of the financial crisis. It has averaged 6.8% p.a. since then and also significantly outpaced inflation. Net issuance increased from an annual average of EUR 39 bn in 1998- 2007 to EUR 66 bn in 2014-23. Within Europe, there are pronounced differences between countries. French companies are the most active issuers (EUR 689 bn). France is the only country where corporate debt as a share of national GDP (25%) is comparable to the US (around 30%).”
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Morten W. Langer
