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This research aims to quantify barriers to cross-border banking in the euro area and their impact on economic outcomes.

June 14, 2026IMF Working PaperOpen Access

Barriers to a European Banking Union

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This research aims to quantify barriers to cross-border banking in the euro area and their impact on economic outcomes.
Analysis of loan-level data from the European credit registry (AnaCredit) and group structures (RIAD).
Estimation of barriers at the country-pair level for relationship formation, loan pricing, and bank branching.
Development of a spatial general equilibrium model to assess the effects of relaxing banking frictions.
Large barriers to cross-border relationships between banks and firms and bank entry were identified.
Interest rate wedges and loan quantity differences were comparatively small.
Partially relaxing banking frictions predicts significant output gains across euro area countries, primarily driven by increases in capital and labor.

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Implication

Quantitative analysis reveals barriers to cross-border banking affect credit allocation and output in European countries, suggesting significant implications.

Cite This Study

Capelle et al. (2026) studied this question.

synapsesocial.com/papers/6a2e46dbb1cc60ccdea8b8c5 https://doi.org/10.5089/9798229049696.001

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Implication

Quantitative analysis reveals barriers to cross-border banking affect credit allocation and output in European countries, suggesting significant implications.

Barriers to a European Banking Union

Key Points

Discussion

Implication

Cite This Study

Barriers to a European Banking Union

Key Points

Discussion

Implication

Cite This Study

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