Is Europe Overbanked?

52 Pages Posted: 5 Nov 2020

See all articles by Marco Pagano

Marco Pagano

University of Naples Federico II - Department of Economics and Statistics; Centre for Studies in Economics and Finance (CSEF); Einaudi Institute for Economics and Finance (EIEF); Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Sam Langfield

European Central Bank

Viral Acharya

affiliation not provided to SSRN

Arnoud Boot

affiliation not provided to SSRN

Markus K. Brunnermeier

affiliation not provided to SSRN

Claudia Buch

Deutsche Bundesbank

Martin F. Hellwig

affiliation not provided to SSRN

André Sapir

affiliation not provided to SSRN

Ieke van den

affiliation not provided to SSRN

Date Written: June, 2014

Abstract

Banking has grown too much in Europe - in three senses. First, the European banking system has reached a size where its contribution to real economic growth is likely to be nil or negative. Second, the European financial structure is biased towards banks (rather than securities markets), which results in excessively volatile credit creation and lower economic growth. Third, large universal banks - which perform a wide range of banking services, and are peculiarly common in Europe - contribute more to systemic risk than small and narrowly focused banks. To deal with these problems, policymakers should consider new measures such as aggressive anti-trust policy, structural reform of the banking sector, and a capital markets union to address Europe's overbanking problem.

Keywords: banks, financial structure, systemic risk, universal banks, bank regulation

JEL Classification: G10, G20

Suggested Citation

Pagano, Marco and Langfield, Sam and Acharya, Viral and Boot, Arnoud and Brunnermeier, Markus K. and Buch, Claudia and Hellwig, Martin F. and Sapir, André and den, Ieke van, Is Europe Overbanked? (June, 2014). ESRB: Advisory Scientific Committee Reports 2014/4, Available at SSRN: https://ssrn.com/abstract=3723325

Marco Pagano (Contact Author)

University of Naples Federico II - Department of Economics and Statistics ( email )

Via Cintia - Monte S. Angelo
Napoli, 80126
Italy
+39 081 675306 (Phone)
+39 081 7663540 (Fax)

Centre for Studies in Economics and Finance (CSEF) ( email )

Via Cintia
Complesso Monte S. Angelo
Naples, Naples 80126
Italy

Einaudi Institute for Economics and Finance (EIEF)

Via Sallustiana, 62
Rome, 00187
Italy

Research Institute of Industrial Economics (IFN)

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http:/www.ecgi.org

Sam Langfield

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Viral Acharya

affiliation not provided to SSRN

No Address Available

Arnoud Boot

affiliation not provided to SSRN

Markus K. Brunnermeier

affiliation not provided to SSRN

No Address Available

Claudia Buch

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Martin F. Hellwig

affiliation not provided to SSRN

No Address Available

André Sapir

affiliation not provided to SSRN

No Address Available

Ieke van Den

affiliation not provided to SSRN

No Address Available

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