Speakers
Objectives
Objectives
The session will examine how interest rate dynamics and margin structures shape bank competitiveness, including differences in interest rate pass-through across Member States and the impact of variable-rate versus fixed-rate lending models on profitability and “profit pools” within Europe.
The discussion will also address the global rise of non-bank financial intermediation, which is reshaping financing patterns across all major jurisdictions. While this trend is not specific to Europe, it raises important questions about whether European banks are able to remain central players in an increasingly market-based financing ecosystem, and to capture value beyond traditional interest income.
Participants will assess the effectiveness and limits of current policy initiatives, notably the completion of the Banking Union and the implementation of the Savings and Investments Union, in addressing constraints related to scale, capital requirements, market depth and banks’ ability to compete internationally—particularly in a context of regulatory and monetary divergence with the United States.
Finally, the session will explore the interaction between finance, growth and competitiveness, including whether Europe’s low-growth environment and interest rate conditions impose a structural ceiling on bank profitability that financial reforms alone cannot overcome. The objective is to clarify which policy priorities are most critical to ensure that European banks can sustainably support investment, growth and Europe’s strategic autonomy in a changing global financial system.
Points of discussion
- To what extent do Europe’s macroeconomic and monetary conditions — combined with market fragmentation and prudential requirements — create a structural ceiling on the scale, profitability and global competitiveness of EU banks, despite the recent recovery in returns?
- In the context of a global shift towards more market-based finance, how should the role of EU banks evolve within Europe’s financing ecosystem to remain central to value creation and internationally competitive?