Europe 2020 and the Financial System: Smaller is beautiful

Europe’s 2020 strategy calls for “smart, sustainable and inclusive growth”, but ironically, these qualities are just the opposite of what the financial sector has stood for in the EU, and how it continues to be perceived by the public. According to CEPS Chief Executive Karel Lannoo, the huge regulatory agenda that is on the table should be able to help tame the financial sector, but whether it will help it to meet the Europe 2020 objectives is an open question. His new Policy Brief analyses the impact of the financial crisis on the banking sector, beginning with an overview of the effect of the financial crisis on large banks and a review of the key regulatory reforms proposed by Europe 2020, discussing their impact on the structure and profitability of the banking sector.