To attract more retail investors, Lagarde proposed a 'European Savings Standard' to provide accessible and transparent savings products across the EU.

The Capital Markets Union aims to eliminate bureaucratic barriers between EU member states, facilitating easier access to funding across borders, but progress has been slow since its proposals in 2015.

She noted that the current geopolitical climate poses significant threats to free trade, further underscoring the urgency for capital market integration.

Lagarde argued that a unified capital market is essential for converting Europe's high savings into greater prosperity, which would enhance consumer spending and strengthen internal demand.

Currently, European households hold approximately €11.5 trillion in cash and deposits, representing about one-third of their total financial assets, which is not being effectively invested.

She suggested that aligning the EU's deposit-to-financial-assets ratio with that of U.S. households could redirect up to €8 trillion into long-term investments, generating an annual flow of around €350 billion.

Lagarde concluded by urging European leaders to move from mere awareness to decisive action to overcome capital market fragmentation, which is critical for economic dynamism and technological progress in Europe.

The urgency for establishing a Capital Markets Union has been heightened by TotalEnergies' consideration of a stock listing in New York, prompting calls for more efficient capital markets in Europe.

Lagarde criticized the lack of tangible progress towards the Capital Markets Union, attributing it to insufficiently defined implementation plans.

She pointed out that the lack of funding is a significant barrier to innovation in Europe, stressing the importance of fostering investment in venture capital and supporting startups.

Lagarde highlighted that increasing global trade tensions and a widening technology gap with the United States necessitate greater economic integration in Europe.

Christine Lagarde, President of the European Central Bank, emphasized the urgent need for the integration of Europe's capital markets during her speech at the 34th European Banking Congress in Frankfurt.