Banking in Europe
This chapter focuses on the evolution of the banking industry in the European Union since the signing of the Treaty of Rome in 1957 to the present day. We provide an overview of developments in the regulation, financial integration, and the structure and performance of the European banking industry. A brief discussion of the global financial crises and their resultant impact on European banks together with coverage of the later Eurozone sovereign debt crisis is also presented, along with structural reforms, and the ongoing progress in creating a fully integrated banking and financial services industry throughout the Eurozone. A major challenge for the industry relates to restoring profitability back to pre-crises levels. At present, many banks remain encumbered by regulatory demands that, while helping their solvency, act as a drag on performance. Given the regulatory and economic environment under which European banks currently operate, their performance will be subdued for some time to come.