Meanwhile, FIG, ABS and corporate bond markets are on the move again — even in sterling. The financial wheels are turning, albeit squeakily.
However, one part of Europe that is jammed up is the European Commission, which is trying to flesh out its Capital Markets Union plan.
CMU has lost its champion, Jonathan Hill, the British financial services commissioner. That is a blow for the interests of the UK and London, but if CMU stalls, it will also hurt the long term health of Europe’s economy.
CMU — a sprawling idea — boils down to creating deeper, more efficient markets, reducing reliance on bank lending — something many blame for the region's anaemic growth.
Europe now faces another crisis, but with all the old weaknesses. It is therefore essential that Hill’s replacement, Valdis Dombrovskis, picks up the CMU baton and drives Europe's capital markets to match those of the US.
If he wants a clue of where to start, he would do well to look at private debt markets, which can have the virtue of being open all hours, including during crises.
Right on cue, Edenred of France this week closed a €250m Schuldschein. When its arrangers launched the deal over a month ago they did not know the referendum result, but they knew the market was strong enough to withstand any fallout. Even in 2009, the Schuldschein market had a record year. Meanwhile, France’s EuroPP market is wide open.
Europe’s public debt markets will recover after their tentative reopening this week. But in the meantime, private markets are there for those in need. The Commission should take note.