Eurozone bank network getting smaller

21.01.14 @ 17:52

  1. By Benjamin Fox
  2. Benjamin email

BRUSSELS - The number of banks in the eurozone fell by almost 4 percent in 2013, according to data published Tuesday (21 January) by the European Central Bank .

  • The number of eurozone banks continues to fall, according to the European Central Bank (Photo: ECB)

There were 6,790 monetary financial institutions (MFIs) based in the euro area at the start of 2014, compared with 7,059 one year ago, a 3.8 percent reduction.

Crisis countries Cyprus and Greece saw the largest reductions, losing 26 percent and 17 percent of their financial sector firms over the past year.

Greece now has just 62 financial institutions, while Cyprus' sector has fallen from 409 firms when it joined the EU in 2004 to 103.

As part of a hastily agreed €17 billion bailout package, the Mediterranean island was forced to liquidate Laiki bank, its second largest lender, leaving rival Bank of Cyprus to take over 312 Laiki branches.

But a decline in the number of financial firms is not a trend that is exclusive to the EU's crisis countries.

Despite seven EU countries having joined the currency union since 2001, the number of MFIs has fallen by 3,066 - equivalent to 31 percent - since the launch of the euro in 1999.

Germany and France accounted for 42 percent of all euro area MFIs, a figure almost unchanged from a year ago.

Meanwhile, Portugal, Slovenia and Latvia are the only eurozone countries to have seen an increase in their number of institutions over the last twelve months.

The bloc's shrinking bank network, which saw more than 5,500 bank branches shut down last year across the EU, also threatens to reduce access to basic bank services for thousands of Europeans.

The European Commission estimates that over 58 million EU citizens do not have a bank account.

Access to cash machines and basic services is also becoming an acute problem for the bloc's poorest citizens.

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