Euro zone: Has bank intermediation become more expensive than market-based financing?

One “endogenous” reason for euro-zone companies to finance themselves more in financial markets directly and less via bank credit would be if bank intermediation had become more expensive than market-based financing . This could be due in particular to the euro zone’s new banking regulations: bail-in instead of bail-out, sizeable low-yielding, liquid and risk-free asset holdings, high regulatory capital requirements. We examine the evolution of the cost of bank intermediation relative to that of market-based financing (in particular in the bond market) in the euro zone and conclude that corporate financing via bank credit is more expensive today than before the 2008 crisis but still remains cheaper than bond financing .