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Bank Debt in Europe: “Are Funding Models Broken”

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  • Mrs. Vanessa Le Lesle

Abstract

The crisis in Europe has underscored the vulnerability of European bank funding models compared to international peers. This paper studies the drivers behind this fragility and examines the future of bank funding, primarily wholesale, in Europe. We argue that cyclical and structural factors have altered the structure, cost, and composition of funding for European banks. The paper discusses the consequences of shifting funding patterns and investor preferences and presents possible policy options and bank actions to enhance European bank funding models’ robustness.

Suggested Citation

  • Mrs. Vanessa Le Lesle, 2012. "Bank Debt in Europe: “Are Funding Models Broken”," IMF Working Papers 2012/299, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2012/299
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=40181
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    References listed on IDEAS

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    1. Carmen M. Reinhart & M. Belen Sbrancia1, 2015. "The liquidation of government debt," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 30(82), pages 291-333.
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    Cited by:

    1. V. Brousseau & Alexandre Chailloux & Alain Durré, 2013. "Fixing the Fixings: What Road to a More Representative Money Market Benchmark?," IMF Working Papers 2013/131, International Monetary Fund.
    2. Everett, Mary & McQuade, Peter & O’Grady, Michael, 2020. "Bank business models as a driver of cross-border activities," Journal of International Money and Finance, Elsevier, vol. 108(C).
    3. Pablos Nuevo, Irene, 2019. "Has the new bail-in framework increased the yield spread between subordinated and senior bonds?," Working Paper Series 2317, European Central Bank.

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