US banks are 'dominant' in European derivatives, EBA says

Sinead Cruise and Stefania Spezzati

Thu, Apr 3, 2025, 7:22 AM 2 min read

By Sinead Cruise and Stefania Spezzati

LONDON (Reuters) - Non-EU banks person carved retired "dominant" roles successful immoderate of Europe's cardinal fiscal markets, including derivatives wherever U.S. banks prevail, the European Banking Authority said connected Thursday arsenic concerns astir the strategical autonomy of the European fiscal assemblage grow.

In its latest deep-dive into the dependence of the EU banking assemblage connected overseas banks and overseas currencies, the EBA - which has a mandate to support and enactment the EU fiscal strategy - said that U.S. banks had a astir 28% stock of the EU derivatives marketplace astatine December 2023, consolidating a inclination archetypal observed successful mid-2021.

Overall, non-EU banks' marketplace stock was 33.73%. This dense beingness successful derivatives compares with marketplace shares of 8.17% successful loans and 6.06% successful indebtedness securities, according to the data.

The survey was published little than a time aft the United States imposed a slew of tariffs connected imports, rattling markets and stoking fears of a heavy planetary recession.

Strategic allies and trading partners of the United States are evaluating their reliance connected the superpower, their self-sufficiency successful fiscal and subject terms, and however they mightiness support themselves if the uneasy narration continues to sour.

Some European cardinal banking and supervisory officials are questioning whether they tin inactive trust connected the U.S. cardinal bank, Reuters reported past month.

The wide marketplace stock of non-EU banks crossed each assets stands astatine astir 10%, down from astir 12% successful the erstwhile report, the EBA said.

By currency, 67% of EU/EEA banks' exposures is denominated successful euros, 19% is successful U.S. dollars, a level which has remained unchangeable since mid-2021, according to the EBA.

"The marketplace shares successful definite areas, specified arsenic involvement complaint derivatives, interest income reaped from commodity trading and from providing corporate concern services, are substantially higher and are successful immoderate cases indicative of ascendant roles played by non-EU institutions successful the EU banking market," it said.

(Additional reporting by Tommy Reggiori Wilkes;Editing by Elaine Hardcastle)