Not at all! This 18% of the balance sheet total for the entire euro area banking system is not evenly spread across all countries, but is essentially concentrated in three: Germany, Austria and Italy. These three countries alone are home to four-fifths of all the supposedly “less significant” institutions, whose balance sheet total amounts to 80% of annual economic output in Austria and Germany.
And in Germany, it is precisely these institutions that provide funding to small and mediumsized enterprises, which, in turn, form the bedrock of the economy. All in all, the “less significant” institutions in Germany finance 70% of the regional economy.