Britain's departure from the European Union has created an unprecedented sense of urgency for "full and unwavering" political backing to integrate the EU's capital market, a report said on Thursday. The EU began its capital markets union (CMU) project in 2015 to increase the role of stock and bond markets in funding companies and reduce their reliance on bank loans.

Despite new laws and a reboot, results have been patchy and Brexit was a reminder of how much the EU relies on London, Europe's biggest financial centre.

A task force set up by the European Commission, the EU's executive arm, said in a report on Thursday that completing the CMU would provide a full range of financial products, services and infrastructure for its economy. "The European Union is in the process of seeing some of its market infrastructure moving off-shore," the report said.

LCH, a unit of the London Stock Exchange, clears the bulk of euro-denominated interest rate swaps, but will need EU access after December when a "standstill" transition period ends. Britain left the EU last month and Brussels is now assessing how much access it will give to UK-based financial firms like banks, asset managers, insurers and market infrastructure firms like clearing houses and trading platforms. A senior adviser to the EU in the trade talks with Britain said on Wednesday that the need to deepen the bloc's capital market will be a factor in the assessments.

The report said that capital markets in the 27 countries of the EU have become more integrated than in the past. "However, they still do not function as one, and their main centre, London, is now outside the EU," the report said. The task force, known at the high level forum on the capital markets union, will publish specific recommendations in May.

They are likely to include addressing tax barriers, improving volumes in secondary securities markets, and better integration in securities trading and post-trading, a sector that includes clearing. The report said EU states must go beyond verbal support for CMU and back targeted action with a clear timetable.

"For the completion of the CMU, it is now essential to target the measures that may be politically difficult, but that will lead to tangible results," report said.

Michael Cole-Fontayn, chairman of AFME, a European banking and markets lobby, said it was vital to have ambitious recommendations for the next phase of CMU.