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Europe’s Single Supervisory Mechanism: Most small banks are German (and Austrian and Italian) – a closer look at the ECB’s list shows that the smaller banks are concentrated in a limited number of countries, much more so than larger ones

Véron, Ν. (2014) “Europe’s Single Supervisory Mechanism: Most small banks are German (and Austrian and Italian) – a closer look at the ECB’s list shows that the smaller banks are concentrated in a limited number of countries, much more so than larger ones“, Bruegel Think Tank, 22 September.

 

A well-known limitation of Europe’s banking union is the fact that most banks in the euro area will escape direct supervision by the European Central Bank (ECB) and the Single Resolution Board that will address insolvent banks from next year. Indeed, the ECB’s recently published mapping identifies 3,652 banks in the euro area, of which only 120 groups are subject to its direct supervisory authority, though these 120 larger banking groups represent at least 80 percent of total euro-area banking assets.

Germany, Austria and Italy together are home to almost four-fifths of all smaller banks, and Germany carries the lion’s share

A closer look at the ECB’s list shows that the smaller banks are concentrated in a limited number of countries, much more so than larger ones. Germany, Austria and Italy together are home to almost four-fifths of all smaller banks, and Germany carries the lion’s share. (1,697 out of the 3,532 smaller banks which the ECB calls “less significant supervised entities” are in Germany.)

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