The CMU is the vehicle the EU’s executive European Commission hopes will increase market-based funding for companies and wean the 28-country bloc off its heavy reliance on banks.
It will focus on cutting red tape for smaller companies which want to list on stock markets to raise funds, and find ways to increase securitisation, or the sale of debt based on a pool of loans like mortgages.
In the first response to the EU plans from a British regulator, Cunliffe urged some caution.
“It is abundantly clear... that achieving the necessary step change in market-based financing in the EU means a marathon not a sprint,” Cunliffe said.
“Though there may be early wins, it will involve a carefully planned, detailed and sustained effort over a number of years and in a very wide range of areas. The benefits however could be very large indeed.”
Creating a deeper stock market should be the priority for the CMU as equity provides the most efficient forms of risk sharing, he said.
But institutional change seen with the new eurozone banking union will not be needed for the CMU, Cunliffe added.