Savings, finance, and capital for entrepreneurial ventures

Abstract

To promote an entrepreneurial society, many of the institutions that mobilize and allocate savings and financial resources in the European Union must be reformed. The proposals in this area seek to address the bias against small, innovative, and young ventures in Europe’s financial markets, dominated by banks and large pension funds. These intermediaries tend to prefer large debt-based investments over the small equity investments that young ventures need, and the problem is exacerbated by perverse tax incentives. In addition, we discuss reforms that can support the emergence of new, platform-based intermediation in financial markets. Competencies for reform are divided among member states and the Union, but often fall outside the traditional scope of entrepreneurship policy.