Disintermediation is not the solution to the problem of the lack of capital mobility in the euro zone

Capital mobility has been absent in the euro zone s ince the subprime and euro-zone crise s : the euro-zone countries with excess savings no longer lend them to the other countries. This situation is costly for growth, since there is no longer an efficient allocation of savings in the euro zone. It is hoped that a “capital markets union” will restore capital flows between the euro-zone countries: integrated markets will be created for equities, bonds and short-term securities. But this would restore capital flows only if the financing of the economy were disintermediated: companies would raise capital in unified financial markets; banks would refinance loans to households in unified markets (for covered bonds, ABS, etc.). The problem is that the euro-zone economy simply cannot be disintermediated: households have a strong preference for risk-free and liquid savings and want capital guarantee s . The solution to the problem of capital immobility in the euro zone is therefore not disintermediation and financing in unified capital markets, but the creation of pan-European banking groups with free movement of bank funding (equity, cash, etc.) between the entities of these groups in the various countries (i.e. the end of ring-fencing).