US regulatory incentives for equity financing ? The essential role of public pension plans

Bulletin No. 260, article 3. The US economic model based on equity financing contrasts with the European model which relies predominantly on debt financing; at the end of 2024, in the United States, corporate equity amounted to over 210% of gross domestic product, compared with around 90% in Europe. Since the 1980s, US pension funds, which manage part of the country’s pension system on a capitalisation basis, have played an essential role in providing firms with equity capital.