Bank Debt in Europe: “Are Funding Models Broken”

Vanessa Le Lesle

No 2012/299, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; senior debt; bank funding; unsecured debt; liability structure; profitability prospects; self-financing effort; Banks; bank debt; funding; liabilities; deposits; Basel; bail-in; funding model; bank lending; bank liability structure; funding challenge; bank creditor; bank capital; Liquidity; Financial statements; Liquidity requirements; Liquidity risk; Europe; Asia and Pacific (search for similar items in EconPapers)
Pages: 40
Date: 2012-12-20
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Citations: View citations in EconPapers (4)

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