Euro zone: Banks’ comparative advantages should not be forgotten

In the euro zone, a shift is beg inning to take place from bank-based corporate financing to market-based corporate financing. This development results in particular from the new regulatory constraints curbing the supply of bank credit. But we believe that it is cause for concern, as banks have well-known comparative advantages when it comes to financing the economy : Better information on the situation of borrowers; Greater capacity to provid e savers with liquidity; Better risk diversification.