In net terms the number of credit institutions has fallen by 9% since 2008, or around 600 institutions, while the total assets of the euro area banking sector have declined by almost 12%. The second largest reduction in the value of assets was recorded here in Ireland.
This process has seen euro area banks become significantly less leveraged, with the average loan-to-deposit ratio falling from 144% in 2008 to 120% in mid-2013. I expect that this ratio will continue to fall and converge towards 100% as banks seek to further consolidate their balance sheets and develop safer, more sustainable business models.