ECB Pushes for Cross-Border Bank Mergers to Close Gap with US
The European Central Bank (ECB) has called on euro area lenders to merge across national borders, citing the need for greater concentration in the banking sector. ECB Vice-President Boris Vujčić argues that the current fragmentation is holding back competition with the United States.
Vujčić pointed out that while the euro area banking sector has become more concentrated over the past decade, this process has been driven mainly by domestic mergers and acquisitions. The concentration at EU level remains lower than in the US, where banks tend to operate across multiple states.
The ECB is urging member states to complete the European deposit insurance scheme (EDIS), a key component of banking union that was proposed by the European Commission in 2015 but has been stalled due to national opposition. Vujčić also emphasized the need for greater cross-border lending, which currently accounts for only around 16% of total corporate lending within the euro area.