A remaining challenge is though the fact that at present banks are often competing for the same deposits, which makes it difficult to achieve substantial increases in their deposit bases and may also erode their margins. At the same time banks have reviewed the geographical location of their assets.
The increasing internationalisation of important European groups reveals the preference among large EU banks for regional diversification. Reforms of the regulatory framework that aim to render bank business models more resilient are a key factor that will contribute to moving funding structures away from volatile short-term sources towards more stable long-term ones, such as capital and deposits.