{
  "title": "Barriers to a European Banking Union",
  "publication": "IMF Working Papers, June 12, 2026",
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  "summary": "We quantify barriers to cross-border banking within the euro area and their consequences for credit allocation and output.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Quantifies barriers to cross-border banking within the euro area and their consequences for credit allocation and output.\n- Uses loan-level data from the European credit registry (AnaCredit) and group structures (RIAD).\n- Estimates barriers at the country-pair level for:\n  - relationship formation between banks and firms,\n  - loan pricing (interest rates and loan quantities),\n  - banks’ branching and cross-border entry decisions.\n- Embeds empirical estimates into a quantitative spatial general equilibrium model with heterogeneous banks and firms subject to cross-border frictions.\n- Partially relaxing frictions predicts sizable and heterogeneous output gains across euro area countries, driven primarily by increases in capital and labor rather than improvements in allocative efficiency."
    },
    {
      "heading": "Key empirical findings",
      "content": "- Barriers to cross-border relationships between banks and firms are large.\n- Barriers to cross-border bank entry are large.\n- Wedges on interest rates and loan quantities are comparatively small.\n- The estimated edges are strongly associated with differences in national banking regulations, measured using a novel dataset on regulatory distances."
    },
    {
      "heading": "Methodology and data",
      "content": "- Microdata sources:\n  - AnaCredit (European credit registry) — loan-level data.\n  - RIAD — bank group structures.\n- Estimation targets:\n  - country-pair level frictions in relationship formation, loan pricing, and branching decisions.\n- Modeling approach:\n  - Quantitative spatial general equilibrium model with heterogeneous banks and firms.\n  - Frictions incorporated in relationship formation, loan pricing, and bank entry."
    },
    {
      "heading": "Model implications and channels",
      "content": "- Relaxation of cross-border frictions leads to:\n  - sizable and heterogeneous output gains across euro area countries.\n  - gains mainly through increases in capital and labor inputs.\n  - limited gains through allocative efficiency improvements relative to input increases."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Bank credit, Credit, Cross-border banking, Deposit insurance, Financial crises, Financial institutions, Financial services, Loans, Money\n- Keywords: Bank credit, bank entry, banking union, banks, cost of capital, Credit, credit allocation, Cross-border banking, cross-border frictions, Deposit insurance, Europe, European financial integration, IMF working papers, loan pricing, Loans, output gain\n\nBarriers to a European Banking Union, IMF Working Papers, June 12, 2026.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2026/06/12/barriers-to-a-european-banking-union-576858"
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    "Authors: Damien Capelle, Adriano Fernandes, J.J. Kruger, Peter McAdam",
    "Published: June 12, 2026",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229049696.001",
    "Quantifies barriers to cross-border banking within the euro area and their consequences for credit allocation and output.",
    "Uses loan-level data from the European credit registry (AnaCredit) and group structures (RIAD).",
    "Estimates barriers at the country-pair level for:",
    "Embeds empirical estimates into a quantitative spatial general equilibrium model with heterogeneous banks and firms subject to cross-border frictions.",
    "Partially relaxing frictions predicts sizable and heterogeneous output gains across euro area countries, driven primarily by increases in capital and labor rather than improvements in allocative efficiency.",
    "Barriers to cross-border relationships between banks and firms are large.",
    "Barriers to cross-border bank entry are large.",
    "Wedges on interest rates and loan quantities are comparatively small.",
    "The estimated edges are strongly associated with differences in national banking regulations, measured using a novel dataset on regulatory distances.",
    "Microdata sources:",
    "Estimation targets:",
    "Modeling approach:",
    "Relaxation of cross-border frictions leads to:",
    "Subject: Bank credit, Credit, Cross-border banking, Deposit insurance, Financial crises, Financial institutions, Financial services, Loans, Money",
    "Keywords: Bank credit, bank entry, banking union, banks, cost of capital, Credit, credit allocation, Cross-border banking, cross-border frictions, Deposit insurance, Europe, European financial integration, IMF working papers, loan pricing, Loans, output gain",
    "**Working Paper**"
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