A report for the European Parliament shows that banking remains dominated by national champions, especially in the large countries.

But the authors don’t identify the real culprits behind the failing Banking Union.

Read the full report here: https://www.europarl.europa.eu/thinktank/en/document/IPOL_STU(2024)760272

Topics discussed in this episode:

In the euro area, the banking market is dominated by domestic groups in the large countries (Germany, France, Italy, Spain, the Netherlands).

In smaller countries, the share of foreign banks is much larger.

There was a lot of M&A of European banks up until about 2010. Since then, M&A has been much lower and more focussed on domestic consolidation.

The report blames low valuations of banking stocks for the lack of pan-European banks.

However, the title "the long wait for cross-border integration" implies that politicians have "done their part" in creating a Banking Union, and bankers have failed to deliver on the vision of the EU's policy makers.

In reality, further European consolidation of banks was/is harmed by low economic growth, negative interest rates, government ownership, and hostility to foreign acquisitions.