European markets may still view some banks as ‘too big to fail’, paper argues
European governments may be seen as supporting ‘national champions’ in banking, researchers say
Large European banks benefiting from lower interbank borrowing costs relative to small ones may mean some institutions are still considered "too big to fail" by the financial markets, a working paper published by the Bank of Finland says.
In Are too-big-to-fail banks history in Europe? Evidence from overnight interbank loans, Eero Tölö, Esa Jokivuolle and Matti Viren use data from the proprietary database of the Eurosystem's Target2 settlement system. The authors use the data to establish that
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