Abstract
Banks across Europe have been through a significant restructuring process in response to weak profitability and to meet the new laws and regulations that have been approved in the wake of the financial crisis. Euro area banks have spent the last decade recovering from the global financial crisis. While the performance of European banks has improved since 2008, the average return on capital is still low. This average covers large geographic differences: banks in some European markets have completed this restructuring process, while other markets continue to struggle. This chapter in principle analyses the process of restructuring that euro area banks have been facing. Then it investigates the European banking system, presenting structural developments in the euro area, providing a broad set of structural information.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The sample covers all commercial banks in the euro area on Orbis Bank. Banks that did not report data on net interest income or net fee and commission income from 2017 to 2013 have been excluded from the analysis.
- 2.
Chapter 2 is devoted to analysing NPLs in the euro area banking system.
- 3.
- 4.
The sample is formed by all euro area commercial banks with data available on Orbis Bank. Since only very few data are available in 2009 and 2010 (for 0 to 12 banks), the analysis is restricted to the 2011–2018 period. Focusing on this period of time allows the progress made since 2011 to be captured, when euro area banks were facing the sovereign debt crisis, which had been even more challenging than the global financial crisis for some euro area countries.
- 5.
At the time of writing only some banks from the sample had published 2018 annual reports.
References
Berger, A., and D. Humphrey. 1991. The dominance of inefficiencies over scale and product mix economies in banking. Journal of Monetary Economics 28.
———. 1992. The megamergers in banking and the use of cost efficiency as an antitrust defines. Antitrust Bulletin 37: 541–600.
Berger, A., G.A. Hanweck, and D.B. Humphrey. 1987. Competitive viability in banking. Scale, scope and product mix economies. Journal of Monetary Economics 20 (3): 501–520.
EBA. 2018. 2018 EU-wide stress test results, November.
ECB. 2016. Adapting bank business models: Financial stability implications of greater reliance on fee and commission income. Financial Stability Review 2.
———. 2017. Financial integration in Europe, May.
———. 2018a. Financial stability review, May.
———. 2018b. How can euro area banks reach sustainable profitability in the future? Financial Stability Review, November. https://www.ecb.europa.eu/pub/fsr/special/html/ecb.fsrart201811_1.en.html.
———. 2018c. Statistical data warehouse. https://sdw.ecb.europa.eu/browse.do?node=9689369.
———. 2018d. SSM thematic review on profitability and business models. Report on the outcome of the assessment. ECB Banking Supervision, September.
———. 2018e. Financial integration in Europe, May.
Goldman Sachs. 2018. Marcus by Goldman Sachs launches in the UK. https://www.goldmansachs.com/media-relations/press-releases/current/marcus-by-goldman-sachs-launches-in-the-uk.html.
IMF. 2018. Euro area policies: Financial sector assessment program – Technical note – Systemic risk analysis, July.
Molyneux, P., Y. Altunbas, and E.P.M. Gardener. 1996. Efficiency in European banking. John Wiley and Sons.
Philippon, T. 2018. The FinTech opportunity. New York University, Stern School of Business, Mimeo.
Reuters. 2018. Goldman Sachs opens digital consumer bank in Britain. https://www.reuters.com/article/us-goldman-sachs-britain/goldman-sachs-opens-digital-consumer-bank-in-britain-idUSKCN1L814J.
Revell, J. 1997. The recent evolution of financial systems. St. Martin’s Press.
Sironi, A. 2018. The evolution of banking regulation since the financial crisis: A critical assessment. Baffi Carefin Centre Research Paper No. 2018-103.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Arnaboldi, F. (2019). The Euro Area Banking System: Where Do We Stand?. In: Risk and Regulation in Euro Area Banks. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-23429-4_1
Download citation
DOI: https://doi.org/10.1007/978-3-030-23429-4_1
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-23428-7
Online ISBN: 978-3-030-23429-4
eBook Packages: Economics and FinanceEconomics and Finance (R0)