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The new Banking Union landscape in Europe: consolidation ahead?

Author

Listed:
  • Schoenmaker, Dirk

    (VU University Amsterdam)

Abstract

The establishment of the Banking Union (B.U.) creates a large banking market comparable to that of the U.S. This paper calculates the market share of the top 20 banks in the new B.U. France appears to take a prominent place with 5 banks in the top 10, followed by Germany, the Netherlands and Italy. Earlier integration episodes did not lead to cross-border consolidation in Europe. In contrast, the lifting of interstate banking restrictions caused a cross-state merger wave cumulating in large U.S.-wide banks. This paper investigates whether cross-border consolidation can be expected within the B.U. The answer is yes over time, but not yet as subdued growth, lingering influence of national supervisors and cultural differences may hamper cross-border mergers in the short run. Over time, the B.U. will become an integrated market, where banks can manage their balance sheet at the aggregate B.U. level and the European Central Bank (ECB) conducts supervision with a European perspective.

Suggested Citation

  • Schoenmaker, Dirk, 2015. "The new Banking Union landscape in Europe: consolidation ahead?," Journal of Financial Perspectives, EY Global FS Institute, vol. 3(2), pages 189-201.
    • Handle: RePEc:ris:jofipe:0083
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    Citations

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    Cited by:

    1. Nuno Silva, 2015. "The euro area financial network and the need for better integration," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    2. Iryna Okolelova & Jacob A. Bikker, 2022. "The single supervisory mechanism: Competitive implications for the banking sectors in the euro area," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1818-1835, April.
    3. Théo Nicolas., 2023. "Bank Market Power and Interest Rate Setting: Why Consolidated Banking Data Matte [Pouvoir de marché des banques et fixation des taux d’intérêt : de l’importance de prendre en compte les données ban," Débats économiques et financiers 40, Banque de France.
    4. José Manuel Mansilla-Fernández, 2020. "Non-Performing loans, financial stability, and banking competition: evidence for listed and non-listed Eurozone banks," Hacienda Pública Española / Review of Public Economics, IEF, vol. 232(1), pages 29-52, March.
    5. Pietro Grandi & Caroline Ninou Bozou, 2023. "Bank Market Power and Access to Credit: Bank-Firm Level Evidence From the Euro Area," Journal of Financial Services Research, Springer;Western Finance Association, vol. 63(1), pages 63-90, February.
    6. Cassola, Nuno & Kok, Christoffer & Mongelli, Francesco Paolo, 2019. "The ECB after the crisis: existing synergies among monetary policy, macroprudential policies and banking supervision," Occasional Paper Series 237, European Central Bank.
    7. Iryna Okolelova & Jacob A. Bikker, 2022. "The single supervisory mechanism: Competitive implications for the banking sectors in the euro area," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1818-1835, April.

    More about this item

    Keywords

    Banking Union; European Central Bank; consolidation; financial market;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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