1. The Euro Area Banking System: Where Do We Stand?

Banks across Europe have been through a significant restructuring process in response to weak profitability and to meet the new laws and regulations that have been approved in the wake of the financial crisis. Euro area banks have spent the last decade recovering from the global financial crisis. While the performance of European banks has improved since 2008, the average return on capital is still low. This average covers large geographic differences: banks in some European markets have completed this restructuring process, while other markets continue to struggle. This chapter in principle analyses the process of restructuring that euro area banks have been facing. Then it investigates the European banking system, presenting structural developments in the euro area, providing a broad set of structural information.