Inaugural issue – January 2022

Why the need for a Quarterly Column Series on Capital Markets?

Since 2012 Bocconi University and Equita have teamed up with the objective to produce and disseminate a strong culture promoting the role of capital markets for the Italian economy among policymakers, scholars and students. The lack of a robust financial infrastructure of capital markets, the need to strengthen the  investor base and the intermediation structure of capital markets were clear factors of competitive  disadvantage for Italy vis-à-vis other European countries.

In the past ten years, the research team has produced annual reports centred on the key pillars of the capital market infrastructure: the investors, the issuers and the intermediaries. Well before the outbreak of the pandemic, the overall evidence presented in a series of annual events showed that capital markets in Italy were still underdeveloped.

On one hand, Italy still lacks a strong base of domestic investors able to absorb the debt and equity  instruments issued by domestic companies (Caselli et al., 2014; Caselli et al., 2015; Caselli et al, 2017; Caselli et al., 2018). On the other hand, the still-overwhelming dominance of traditional bank lending has reinforced the dependence of companies, particularly small and medium sized firms (SMEs), on this form of financing. Lastly, the investment banking business is dominated for large segments of Italian companies by large international intermediaries, with only a minor role played by domestic investment  banks/integrated financial intermediaries (Caselli et al., 2020).

After ten years dedicated to developing and disseminating the ‘culture of capital markets’, Bocconi  University and Equita now feel the need to move one step forward in their collaboration. This need is more urgent due to the effects caused of the unprecedented crisis brought on by Covid-19. The unique possibility offered by the extraordinary times we are living to re-imagine and rebuild the capital market infrastructure must be seized, to give Italy and the EU a solid foothold on the path toward a full post-pandemic recovery.

Yet, this possibility is more concrete now than ever, given the increased attention that at international level the European Union is dedicating to strengthen capital markets circuits, with a special focus on SMEs (Technical expert Stakeholder Group (TESG) on SMEs, 2021). More and more, the European Union is considering capital markets and market-based corporate finance as the key for the relaunch of the Eurozone (High Level Forum on the Capital Markets Union, 2020).

Against this backdrop, the Quarterly Columns Series on Capital Markets is a new project that Bocconi  University and Equita have set up to further enhance the attention towards capital markets. Moreover, we  seek to actively propose solutions and tools for decision-makers to achieve the objective of the reform of the European and Italian financial infrastructure. The Quarterly columns target a broad audience, not necessarily confined to academics, scholars and students.

It is clear that this objective requires a multidisciplinary approach. The rethinking of the role, functions and structure of capital markets in Europe stretches across multiple disciplines including finance, macroeconomics, corporate and tax law, governance and management. This multidisciplinary attitude of the Series implies that the contributors will belong to multiple knowledge areas where Bocconi University is active.

It is equally clear that the objective of the Quarterly Columns cannot be limited to the analysis of Italian capital markets. Past years’ research by the Bocconi-Equita group has sometimes covered a broader perspective not necessarily restricted to the Italian context (Caselli et al., 2016; Caselli et al., 2020). However, the success of post pandemic recovery requires an even more focused approach on European Capital Markets as a whole, in line with the growing attention given to the creation of the Capital Market Union.