The European Capital Markets Institute (ECMI) was founded in October 1993 on the joint initiative of the European Federation of Financial Analysts Societies, the Federation of European Securities Exchanges and the International Securities Market Association. The aim of the Institute is to foster research related to the functioning and growth of the European capital markets as a whole. The Institute, with absolute impartiality, debates solutions and puts forward proposals for the implementation of a truly efficient European securities market without endeavouring to protect the status quo of any particular sector or company.
The Institute is more than an academic forum, as its activities and publications require the substantial involvement of experienced market practitioners, pursuing its goal of bringing together both views. In addition, ECMI aims to identify the problems that arise in the capital markets environment rather than providing only answers to given problems.
During the nine years of its existence, the European Capital Markets Institute has become an important source of independent research covering a wide range of topics related to the European financial markets. The Institute has always tried to tackle material issues for capital markets players with an innovative approach. A good example of this is the first book published, in 1993, by ECMI in cooperation with the Royal Institute of International Affairs: The European Equity Markets: The State of the Union and an Agenda for the Millenium. At the time when European forums on financial markets were discussing the changes to be brought about by the implementation of the Investment Services Directive in 1996, the Institute undertook a project focused on the barriers to European equity market integration which would remain after 1996. In the same sense The European Capital Markets with a Single Currency, released in 1999 and edited by INSEAD, was the first report that considered the medium term impact of the euro on capital markets. It analysed the effects of a single currency on a diversity of areas such as the structure of the bond, equity and derivative markets, the risk premium of equity, or the possible changes in the sources of competitive advantages for financial institutions.
ECMI was also one of the first bodies to respond to the challenges which the future integration of Central and Eastern European countries to the EU posed to the European financial markets. The report The New Capital Markets in Central and Eastern Europe, released in 2001 and edited by ZEW, analysed, from an independent point of view, the issue of how the young financial markets of the former communist Eastern European countries were going to assimilate the legislation issued by the EU in this area -- which is aimed to regulate much more developed and sophisticated Western markets -- as well as the future interactions of the capital markets of both areas.
The Institute also cares about the problems that small and medium size companies face when raising funds. In March 2002 it released A Comparison of SMEs in Europe and in the USA, by Morgan Stanley in cooperation with the London School of Economics. This study discusses the nature and characteristics of small and medium sized enterprises (SMEs) private equity and capital markets in Europe and in the United States, dismissing old prejudices and leaving aside conventional wisdom. It analyses the link between SMEs and capital markets on both sides of the Atlantic, and provides answers to the central question: "Despite the relative success of SMEs in Europe, why do SMEs in the USA appear to have closer, more profitable ties to private equity and capital markets?".
The constant growth of transatlantic portfolio investment flows has led ECMI to foster a project on Electronic Markets and Transatlantic Securities Trading, to be carried out by the Council of Foreign Relations among other institutions. The project will have two different outputs: Building a Transatlantic Securities Market will deal with the prospects for US-based traders to secure direct electronic access to European exchanges and vice versa. This is a question of major importance given the benefits in terms of diversification for investors and cost of capital reduction for companies which such a possibility might offer for the economies on both sides of the Atlantic. Electronic Financial Markets will analyse the role of the technological breakthrough which, historically, has most impacted the financial markets: electronic trading in the capital markets.
ECMI also publishes short studies to address current market needs and priorities. In this regard, short papers like Does Europe need an SEC by CEPS, published in 1999, have been welcomed by market participants as works that provide an independent, rigorous and insightful analysis on important and controversial matters. ECMI makes every effort to identify the current interests of market players and academics and has recently issued a call for papers seeking research that tackles topics of present interest to the European financial community.
ECMI contributes articles to leading financial publications and organises conferences and seminars on timely issues. In this regard, ECMI will hold in connection with its annual General Assembly in Athens (Greece) in April 2002 a seminar that will deal with investor protection and the trustworthiness of listed companies information.
Over the last decade, the institute has increased its membership list, attracting a large number of prestigious institutions of the highest standard in the fields of banking, broking and fund management, leading universities, as well as major American and most European exchanges. As of December 2001, there were 142 members from 24 European countries and the United States. Ordinary membership is open to institutions, associations and corporations in the financial sector and industry as well as universities and business schools.
We are confident that, in the years to come, ECMI will continue to serve as an essential arena in which to discuss views and opinions concerning the European financial community. A single financial market needs a source of research produced with an independent European focus, and ECMI is well qualified to provide this.
