This is not a problem in itself as long as the differences are rooted in country-specific risks. But there are still some unjustified differences; there are some uneven patches on the playing field. Such patches run counter to the idea of a European banking union. They prevent the European banking sector from growing together, and they make European banking supervision less efficient.
They require us to apply 19 different national rules instead of a single European one. That is bureaucratic, and it is expensive, first and foremost for banks. If policymakers are serious about European financial integration, they must further harmonise the relevant rules. And there is another source of fragmentation. EU banking law contains some provisions that are known as options and discretions.