A comparative analysis of the US and EU retail banking markets - Wsbi
A comparative analysis of the US and EU retail banking markets - Wsbi
A comparative analysis of the US and EU retail banking markets - Wsbi
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5.2.2.2 European Union<br />
In Europe, <strong>the</strong> ECB also divides <strong>EU</strong> credit institutions<br />
into three groups: large, medium <strong>and</strong> small<br />
institutions. A large bank is defined as a bank with<br />
more than 0.5% <strong>of</strong> <strong>the</strong> total consolidated assets <strong>of</strong><br />
<strong>the</strong> European <strong>banking</strong> sector, which corresponds to<br />
approximately €100 billion in assets. The threshold<br />
between small <strong>and</strong> medium-sized banks is set at<br />
0.005% <strong>of</strong> total consolidated assets, which corresponds<br />
to €1 billion 236 .<br />
According to figures in table 9 below, <strong>the</strong> average<br />
size <strong>of</strong> a bank in Europe was €3,494 million in 2003.<br />
The smallest banks in terms <strong>of</strong> average asset size<br />
are <strong>the</strong> Finnish (€452 million) <strong>and</strong> Austrian banks<br />
(€686 million), whereas Belgian <strong>and</strong> Irish banks are<br />
<strong>the</strong> largest on average, with average asset size <strong>of</strong><br />
€6,940 million <strong>and</strong> €6,044 million respectively 238 .<br />
Looking at table 8 below, which gives <strong>the</strong> asset size<br />
distributions <strong>of</strong> <strong>EU</strong> credit institutions, we can see<br />
that for 2002, 87% <strong>of</strong> <strong>EU</strong> credit institutions fall into<br />
<strong>the</strong> ‘small credit institution’ category, while 12% are<br />
medium sized <strong>and</strong> 1% <strong>of</strong> institutions would be<br />
considered large. However in terms <strong>of</strong> <strong>the</strong> total<br />
assets held by <strong>EU</strong> credit institutions, 65% are held by<br />
large institutions, 31% are held by medium-sized<br />
institutions, while small institutions hold only 5% <strong>of</strong><br />
total assets 237 .<br />
Table 8: Asset size distribution <strong>of</strong> <strong>EU</strong> credit institutions, 2001-2003<br />
2001 2002 2003<br />
Number <strong>of</strong> credit institutions in <strong>the</strong> sample 4,625 5,083 4,258<br />
Of which large (more than € 100 billion in assets) 57 (1%) 51 (1%) n.a. n.a.<br />
Of which medium (between 1 <strong>and</strong> € 100 billion in assets) 968 (12%) 933 (12%) n.a. n.a.<br />
Of which small (less than € 1 billion in assets) 3,600 (87%) 4,099 (87%) n.a. n.a.<br />
Assets <strong>of</strong> <strong>the</strong> credit institutions in <strong>the</strong> sample (in € million) 24,173,643 24,409,351 22,553,000<br />
Of which large 16,042,622 (66%) 15,753,752 (65%) 15,787,100 (70%)<br />
Of which medium 7,217,943 (30%) 7,459,721 (31%) 5,863,780 (26%)<br />
Of which small 913,078 (4%) 1,195,878 (5%) 902,120 (4%)<br />
% <strong>of</strong> total number <strong>of</strong> all <strong>EU</strong> credit institutions 57.2% 65.6% 57.2%<br />
% <strong>of</strong> total assets <strong>of</strong> all <strong>EU</strong> credit institutions 98.8% 99.5% n.a.<br />
Notes: It should be emphasized that <strong>the</strong> percentages given for <strong>the</strong> number <strong>of</strong> credit institutions (i.e. 1%, 12% <strong>and</strong> 87%) refer to <strong>the</strong> total number <strong>of</strong><br />
<strong>EU</strong> institutions, <strong>and</strong> not only <strong>the</strong> ECB samples. These samples take into account 99% <strong>of</strong> <strong>the</strong> total assets <strong>of</strong> <strong>the</strong> <strong>EU</strong> credit institutions, but in terms<br />
<strong>of</strong> number, <strong>the</strong>se samples represent 57% to 66% <strong>of</strong> <strong>the</strong> total number <strong>of</strong> <strong>EU</strong> credit institutions. For <strong>the</strong> year 2003, <strong>the</strong> data refer to domestic credit<br />
institutions only (i.e. excluding foreign controlled subsidiaries <strong>and</strong> branches).<br />
Sources: "<strong>EU</strong> <strong>banking</strong> sector stability", ECB, February 2003; "<strong>EU</strong> <strong>banking</strong> sector stability", ECB, November 2003. "<strong>EU</strong> <strong>banking</strong> sector stability",<br />
ECB, November 2004.<br />
Table 9: Average size <strong>of</strong> <strong>EU</strong> credit institutions, 2002-2003<br />
2002 2003<br />
in $ million in € million in $ million in € million<br />
Total <strong>EU</strong> credit institutions 3,149 3,128 3,494 4,159<br />
Source: ESBG calculations based on data from <strong>the</strong> ECB.<br />
236 “<strong>EU</strong> Banking Sector Stability”, February 2003, ECB.<br />
237 “<strong>EU</strong> Banking Sector Stability”, February 2003, ECB.<br />
238 ESBG calculations based on ECB data for <strong>the</strong> Euro zone, <strong>and</strong> national bank data for Denmark, Sweden <strong>and</strong> UK.<br />
82