Towards a robust financial sector – how should tax and regulation evolve?

Cristina Berechet, October 2014


The economic and financial crisis has affected the ability of the EU financial sector to channel funds towards the real economy. Heavy dependence on bank intermediation, combined with bank deleveraging and reduced investor confidence, has reduced funding to the economy. Firms in Europe rely on bank funding for approximately 85% of their funding needs, with the remainder coming from capital markets, while in the US the split is 45/55. At same time, the European Commission is trying to offer a clear solution to the problems raised by the banks that are too big to fail, too costly to save and too complex to resolve.


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EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).


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