In the banking sector a real single market has to be created

A single market has to be fully implemented in the banking sector, especially in a period, like the current one, of limited liquidity and fears of a credit crunch. National supervisory authorities no longer trust other Countries of the euro area and make large cross-border banks not hold strong exposure towards other Countries.

For example, the main Italian division of a multinational Italian bank is forced to seek funding in Italy and cannot take advantage of the lower cost of capital of its subsidiaries for example in Austria or Germany to transfer liquidity from Austria to Italy. The reason is that supervisory authorities prevent it and stand in the way. According to European Treaties, moreover, one of the fundamental freedoms regards the circulation of capital. Therefore, the implementation of a single market for banks is a binding element that so far has been neglected.

The credit sector is today very fragmented also because of the constraints imposed by national authorities that have negative effects also on banks, consumers and businesses that cannot enjoy the benefits of real competition. A single credit market could favor a reduction in interest rates and an improvement in funding conditions for businesses and households.
The single market Commissioner would already have some of the tools to intervene in this sector. However, incisive and quick actions are necessary. To implement them, political will has to make the common good prevail over national interests. We cannot have a single currency but not a single market for banking systems.

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