This Note Weighs The Merits Of A Capital Market Union (cmu) For Europe, Identifies Major Obstacles In Its Path, And Recommends A Set Of Carefully Targeted Policy Actions. European Capital Markets Are Relatively Small, Resulting In Strong Bank-dependence, And Are Split Sharply Along National Lines. Results Include An Uneven Playing Field In Terms Of Corporate Funding Costs, The Rationing Out Of Collateral-constrained Firms, And Limited Shock Absorption. The Benefits Of Integration Center On Expanding Financial Choice, Ultimately To Support Capital Formation And Resilience. Capital Market Development And Integration Would Support A Healthy Diversity In European Finance. Proceeding Methodically, The Note Identifies Three Key Barriers To Greater Capital Market Integration In Europe: Transparency, Regulatory Quality, And Insolvency Practices. Based On These Findings, The Note Urges Three Policy Priorities, Focused On The Three Barriers. There Is No Roadblock—such Steps Should Prove Feasible Without A New Grand Bargain. Ashok Bhatia, Srobona Mitra, Anke Weber, Shekhar Aiyar, Luiza Antoun De Almeida, Cristina Cuervo, Andre Santos, Tryggvi Gudmundsson.