Banking sector diversity and socioeconomic structure : criteria for matching pairs

It has been an age-old debate whether the financial structure matters for the real economy’s efficiency and therefore for real outcomes. We suppose that varying socioeconomic conditions require appropriately designed corresponding financial sectors. For providing evidence, we firstly determine the specific (quantitative) size and corporate alignments of banking sectors across Europe, based on a sophisticated cluster analysis. Secondly, we develop a coherent system of geographic, social and economic parameters to identify structural patterns within the real economy’s sector. In a conclusive synthesis, we link both analytical parts and draw tentative conclusions for possible future policy implications in Europe.