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Diversity across EU banking sectors: Poorly researched and underappreciated

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  3. Vierteljahrshefte zur Wirtschaftsforschung
  4. Vol. 87, Issue 4
  5. pp. 153–179

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Kotz, H., Schäfer, D. Diversity across EU banking sectors: Poorly researched and underappreciated. Vierteljahrshefte zur Wirtschaftsforschung, 87(4), 153-179. https://doi.org/10.3790/vjh.87.4.153
Kotz, Hans-Helmut and Schäfer, Dorothea "Diversity across EU banking sectors: Poorly researched and underappreciated" Vierteljahrshefte zur Wirtschaftsforschung 87.4, 2018, 153-179. https://doi.org/10.3790/vjh.87.4.153
Kotz, Hans-Helmut/Schäfer, Dorothea (2018): Diversity across EU banking sectors: Poorly researched and underappreciated, in: Vierteljahrshefte zur Wirtschaftsforschung, vol. 87, iss. 4, 153-179, [online] https://doi.org/10.3790/vjh.87.4.153
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Diversity across EU banking sectors: Poorly researched and underappreciated

Kotz, Hans-Helmut | Schäfer, Dorothea

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 87 (2018), Iss. 4 : pp. 153–179

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Duncker & Humblot
DOI
https://doi.org/10.3790/vjh.87.4.153
Language
English
Pages
27
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Author Details

Hans-Helmut Kotz, Center for European Studies, Harvard University, Cambridge, MA, SAFE Policy Center, Goethe-Universität, Frankfurt a. M..

Dorothea Schäfer, German Institute for Economic Research DIW Berlin, CeFEO at Jönköping International Business School and CERBE Center for Relationship Banking and Economics, Rom.

Cited By

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    Zeitschrift für das gesamte Genossenschaftswesen, Vol. 74 (2024), Iss. 1 P.17

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Abstract

Interest in the role of diversity in banking sectors has increased substantially since the financial crisis (and the subsequent sovereign debt crises) have hit European countries differentially. The purpose of this note is to hint at crucial research gaps in terms of appreciating consequences of this variety. In preparation for this, we take stock of the across country diversity of banking sectors in the European Union before and after the financial crisis. Key issues in a future research agenda for evaluating diversity in the banking sector (and the financial sector more generally) have to do with: (a) defining the concept’s empirical meaning and hence its measurable properties, (b) the relationship between diversity and the level of competition (market power)in the banking sector, (c) the link between diversity and banking sector stability, (d) the pertinence of banking sector diversity for mitigating access to finance problems, in particular for SMEs and (e) the interlinkages between diversity in the banking (financial) sector and non-financial, “real” economy diversity (“goodness of fit”-issue, institutional embededdness). Filling the indicated research gaps would be an important contribution to both the debate on deeper integration of Europe’s financial markets (Banking Union, Capital Markets Union)as well as the debate on a sustainable financial architecture, being at the same time conducive to innovation and growth whilst protecting society effectively from large-scale financial crises.

Table of Contents

Section Title Page Action Price
Hans-Helmut Kotz and Dorothea Schäfer: Diversity across EU banking sectors: Poorly researched and underappreciated 1
Summary 1
Zusammenfassung 1
1 Diversity within and across banking sectors—what does it mean? 2
2 Banking sector diversity within the EU: Increasing in the wake of the crises? 4
2.1 The relative size of banking sectors has decreased in many EU countries 5
2.2 Concentration has increased in most EU banking sectors subsequently to the GFC 5
2.3 Competitive environment: Banks gained market power 7
2.4 Capital to assets ratios have increased in most EU banking sectors 1
2.5 Z-scores have increased in most EU banking sectors over the crisis years 1
2.6 But: Non-performing loans have also increased 1
2.7 Does it fit? Diversity in the real economy 1
3 How to measure banking sector diversity? 1
4 Banking sector diversity and stability 1
5 Banking sector diversity and competition 1
6 Banking sector diversity and structure of financial system 2
7 What role does institutional diversity play in financing SMEs? 2
8 Conclusions 2
References 2

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