Banking Union: measuring progress and identifying implementation gaps

The Association for Financial Markets in Europe (AFME) has today published a report highlighting the critical barriers still limiting EU banking consolidation, including over €475 bn in capital and liquidity trapped by regulatory ringfencing, as well as the fact EU banks face higher funding costs versus global peers with stringent MREL requirements (28% of risk weighted assets) exceeding levels in the US (22%) creating a competitive disadvantage. Furthermore, our report finds EU Banking M&A is the slowest in the world with acquisitions taking 285 days on average – far longer than the US (219 days) delaying consolidation and weakening the sector’s efficiency.