For euro area banks, the financial market turmoil has underlined the importance of an adequate management of funding liquidity risk. In particular, many euro area LCBGs continue to show a positive customer funding gap and the median funding gap even increased in 2007.
Although there are wide differences across LCBGs, with some large banks maintaining a deposit surplus or a relatively narrow positive funding gap, overall large euro area banks have become more vulnerable to adverse changes in the cost of, and access to, market-based funding.