Addressing fragmentation and enhancing the interconnectedness of CSEE capital markets

Overview
Project Summary Document

TCRS 24304

Status TC Com approved

Location

Regional

Industry Sector

Financial Institutions

Notice Type

State

PSD Disclosed

17 Sep 2026

Project Description

Enquiries

Business opportunities

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General enquiries

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TCRS 24304

Status TC Com approved

Location

Regional

Industry Sector

Financial Institutions

Notice Type

State

PSD Disclosed

17 Sep 2026

Project Description

Rationale

Capital markets in Central and South-Eastern Europe (CSEE) remain significantly underdeveloped, facing a range of structural challenges that hinder their growth and interconnectedness into the broader European financial ecosystem. The equity market capitalisation-to-GDP ratio varies widely across the region—from just 1.5% in Slovakia to 30% in Croatia—yet the average across seven countries, Bulgaria, Croatia, Hungary, Poland, Romania, Slovakia and Slovenia (the Participating Countries), remains below 15% in stark contrast to the EU average of 68%. Notably, this ratio exceeded 21% in 2010[RA1.1], signalling a persistent erosion of market relevance over the past decade. Several factors contribute to this stagnation: a limited number of IPOs, low market liquidity, a narrow selection of financial instruments, and underdeveloped digital infrastructure. These issues collectively reduce the attractiveness of CSEE markets to both domestic and international investors. The absence of a coherent, integrated regional capital market framework further limits the ability to pool liquidity and attract large-scale institutional investment. Consequently, businesses—especially SMEs and start-ups—struggle to access non-bank financing, while domestic savings remain underutilised, further limiting the pool of capital available for productive investment.

Addressing these challenges requires a coordinated and comprehensive approach aimed at improving market efficiency, accessibility, and investor confidence. Strengthening capital markets in the region is essential not only for fostering economic growth but also for enhancing competitiveness and interconnectedness within the wider European financial system. Market participants and supervisory authorities across the region have expressed strong interest in coordinated regulatory reform to remove cross-border barriers, improve investor access, and strengthen the overall market ecosystem.

A key challenge facing the Participating Countries is their limited scale, compounded by fragmentation across jurisdictions. The small size of local ecosystems—each with distinct market structures and practices—reduces accessibility for both regional and international investors. Despite the application of the common EU regulatory framework the different regulatory and supervisory approaches and practises and disconnected capital market infrastructures limit cross-border activities and present significant barriers to developing deeper, more integrated markets in CSEE. These countries, characterized by relatively small and open economies with limited domestic capital formation, rely heavily on external investment flows. However, divergent legal interpretations, divergent supervisory approaches, and misaligned operational systems hinder efficient cross-border transactions and prevent the formation of a unified regional liquidity pool. Operating isolated capital market value chains—often based on incompatible rules and technologies—raises costs, restricts investor access, and diminishes the region’s appeal as an investment destination. Such incompatibilities also prevent market infrastructure institutions from achieving operational interoperability, a prerequisite for regional interconnectedness. Addressing these gaps through a harmonised regulatory and supervisory framework is therefore critical to unlocking regional interconnectedness, improving market depth, and mobilising greater cross-border capital flows.

This Project is a continuation and further development of efforts already underway at the stock exchange level where stock exchanges and CSDs are working on providing easier access to the trading and post-trading services via interlinking the existing infrastructures. By facilitating cross-border investment and liquidity pooling, this project will contribute to a more resilient regional ecosystem aligned with the Savings and Investments Union and the EU’s competitiveness agenda. The project is fully aligned with the objectives of the Savings and Investments Union and will follow the existing and ongoing work done at EU level in this area to ensure alignment with EU wide objectives and policies, including the Market Infrastructure and Supervision Package.

Technical Assistance Services

As a result, the EBRD wishes to engage a company or consortium of companies (the Consultant) to support Bulgaria, Croatia, Hungary, Poland, Romania, Slovakia and Slovenia with conducting a thorough analysis to identify and address differences and discrepancies in the application and enforcement of the common EU regulatory framework, the effectiveness of supervisory and market practices and procedural barriers that inhibit market development and cross-border activity.

Procurement Enquiries

Any competitive selections for business opportunities relating to this project will be published on the EBRD's website: Consultancy Procurement Opportunities.

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2025. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the Information Request form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy 2024 or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism page to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

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Addressing fragmentation and enhancing the interconnectedness of CSEE capital markets

Project Description

Enquiries

Business opportunities

General enquiries

Project Description

Procurement Enquiries

General enquiries

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)