Recent evolution and trends in the EU banking sector [entrada em enciclopédia]

Abstract

It is widely recognized the role of the banking system for economic development. The European banking sector has undergone structural changes marked by financial globalization, liberalization and banking deregulation that have changed the way in which banking institutions operate. The new competitive environment promoted the adoption of a strategic behavior and the financialization of the economy has changed corporate behavior and banking business models with an increase in risk-taking. The prevalence of excessive leverage brought some concerns regarding risk and financial stability and the 2007 global financial crisis raised the fears of financial uncertainty and its impacts on European countries.