Directorate General for Economic and Financial Affairs (ECFIN). European Commission
As part of the effort to broaden macroeconomic surveillance, this issue of the Quarterly Report on the Euro Area argues that supervisory and regulatory reforms can help avoid future harmful credit and asset price booms in the euro area by keeping banks' leverage in check and by establishing more stringent lending standards.
In keeping with the prominent role occupied by financial market issues in recent months, this issue also looks at a number of closely related topics. It examines the impact of the financial crisis on cross-border M and A activity in the banking sector, concluding that the process of market integration is still ongoing but has slowed as a consequence of the crisis. It also shows that the sovereign debt crisis of 2010 has complicated the ongoing process of balance sheet repair in the financial sector. Finally, the report provides tentative evidence that the tightening of bank credit conditions has caused large non-financial corporations in the euro area to diversify away from their traditional bank-based funding and switch to greater use of bond issuance.
>> Press release 15/12/2010. IP10/1703. Stricter financial regulation can help contain future asset bubbles and reduce macroeconomic imbalances
|pdf: KC-AK-10-002-EN-N (online)|