Fragmented market prevents EU banks from financing bloc's ambitions, EBA chair says

By Jakob Van Calster Sept 24 (Reuters) — Europe's fragmented banking market is preventing lenders from achieving the scale needed to finance the continent's digital, economic-security and defence ambitions, the chair of the European Banking Authority told Reuters. While European banks remain highly capitalised and continue to post strong profits, they are constrained by a single market that is "not as single as it should be", François-Louis Michaud said in an interview on Wednesday. "We know that Europe needs to finance all those transformations: digital, environment, demographic, economic security and defence," Michaud said. "It's existential for the future of Europe." The European Commission is pushing a competitiveness agenda aimed at mobilising investment for digitalisation, defence and economic security, while exploring ways to make cross-border banking easier and deepen the bloc's single market. Expensive National Differences Michaud said mergers were not the only solution and that, from the EBA's perspective, greater cross-border lending and financial integration were equally important. Differences in tax, insolvency and consumer-protection regimes continue to make it expens