Bank Debt in Europe: “Are Funding Models Broken”

Author/Editor:

Vanessa Le Lesle

Publication Date:

December 20, 2012

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2012/299

Subject:

Asset and liability management Bank deposits Banking Deposit insurance Financial regulation and supervision Financial statements Liquidity Liquidity requirements Liquidity risk Public financial management (PFM)

English

Publication Date:

December 20, 2012

ISBN/ISSN:

9781475522037/1018-5941

Stock No:

WPIEA2012299

Pages:

40

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