Europe must recognize the importance of robust capital markets and strong investment banks if it wants to be globally competitive," Bank of Cyprus Holdings Public Ltd. Co. Chairman Josef Ackermann wrote in the Financial Times Jan. 3.
He wrote that 70% of private sector funding is met through capital markets in the U.S., versus only 30% in Europe.
"If the EU wants to be sovereign and prosperous, it must strengthen its banking industry, starting with the capital market business," Ackermann wrote.
Ackermann, the former CEO of Deutsche Bank AG, said Europe's banking industry is in decline, mainly due to being centered around regional sovereign debt, which has kept banks in crisis mode, while their U.S. counterparts focused on consolidation.
But European states have been unwilling to consolidate its over-crowded national markets and kept many struggling banks afloat, Ackermann wrote.