EU Officials Call for Bigger Banks and Deeper Markets to Compete with US

European Union finance ministers and central bank governors met in Dublin to discuss the EU's position in an increasingly competitive global economy. The meeting focused on a European Commission report calling for less political interference in bank mergers and the removal of barriers to cross-border banking within the bloc.

According to European Central Bank Vice President Boris Vujcic, EU banks need greater scale and deeper capital markets to compete with US rivals. He noted that while EU banks compare well with their US peers on liquidity, capitalization, profitability, and efficiency, they lag behind in trading and post-trading activities.

Vujcic emphasized the importance of scale in these areas, saying 'That is an area where scale really matters.' The European Commission report also highlighted the need for greater integration and cross-border consolidation to give EU banks the scale to invest, innovate, and compete globally.

Finance ministers' chair Kyriakos Pierrakakis echoed Vujcic's sentiments, stating 'Greater integration and further cross-border consolidation would give European banks the scale to invest, innovate and compete.' He added that the largest US banks invest more than two-and-a-half times as much in information technology relative to their assets as European lenders.