Making Markets: Supranational Public Borrowers and the Promotion of International Financial Market Integration

This article contributes to the scholarship on how public actors have shaped the direction of international financial market integration. We contend that supranational institutions have both a mandate to support capital market development and can directly contribute to this development through their debt issuance. As large AAA-rated issuers, supranational issuers possess the technical and financial resources to influence market developments. We identify two sets of strategies for doing so: developing strategic market segments and building transnational financial infrastructures. This article focuses on three European supranational institutions – the European Commission, the European Investment Bank (EIB), and the European Stability Mechanism (ESM) – a set of actors that have long been active in international capital markets, but whose agency in international financial governance has not been studied to date. While the specific objectives of supranational debt issuers in supporting financial market integration have differed across structural and historical contexts, we show that their strategic use of borrowing operations has been a fixture for decades.