Europe's bank sector - may need to shrink

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Europe’s bank sector has grown too big and may need to shrink, possibly through mergers or failures, Daniele Nouy, the European Central Bank’s top bank supervisor said on Wednesday.

Reuters: ''All in all, it seems that the European banking sector might indeed have become too much of a good thing,“ Nouy said. ”And we can see at least one of the health issues related to this – many banks in the euro area do not earn their cost of capital.

The news agency also reports that there is room for consolidation in the banking sector both in Italy and in Europe, UBS CEO Executive Sergio Ermotti said on Tuesday, adding political and regulatory authorities would support the process.

“Political and regulatory willingness (to allow banking mergers) are coming,” Ermotti told a banking conference in Milan organised by Bloomberg.

Oversized European banking sector likely to shrink: ECB's Nouy

UBS CEO sees room for banking M&A in Italy and Europe

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