European Central Bank's Vujčić: Fragmentation hampers banking efficiency
by@ecb
Summary
In a recent interview with Reuters, Vice-President Boris Vujčić of the European Central Bank emphasized that fragmentation, rather than regulation, is increasing costs and inefficiencies for banks in Europe. He advocates for the completion of the banking union and the savings and investments union, which he believes would foster a more integrated financial market where banks can expand beyond national borders. Vujčić noted that the current lack of integration complicates the transmission of monetary policy, as different countries use varying mortgage types, affecting how interest rate changes are felt across the euro area.
Analysis
Boris Vujčić: Boris Vujčić serves as Vice-President of the European Central Bank and previously led the Croatian National Bank. In this Reuters interview conducted on 16 September 2026, he addresses topics including energy-driven inflation risks, banking sector competitiveness, and the need to complete the banking union to reduce market fragmentation. He argues that integration, rather than deregulation, is key to allowing European banks to operate at greater scale. Francesco Canepa: Francesco Canepa is a Reuters journalist who conducted the interview with ECB Vice-President Boris Vujčić on 16 September 2026. The discussion covers ECB monetary policy decisions, energy price impacts, and structural issues in European finance. European Central Bank: The European Central Bank is the central bank responsible for monetary policy in the euro area, managing the euro and setting interest rates to maintain price stability. As Vice-President Boris Vujčić explains in the interview, the ECB is actively discussing tools like minimum reserve requirements to manage excess liquidity. Vujčić highlights how fragmentation across EU banking systems affects monetary policy transmission differently across member states. Banking Integration: Completing the banking union and savings and investments union would create an integrated European financial market allowing banks to grow beyond national fragmentation. Policy Transmission: Differences in mortgage types and banking structures across euro area countries mean that ECB interest rate changes are transmitted at varying speeds depending on the member state.
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