The so-called European model of market integration has evolved over many decades. In particular, the original plan to integrate Europe economically via a progressive program of harmonizing national legislation has, particularly in the area of financial markets, given way to a radical alternative...

Small businesses (SMEs) depend on banks for credit. We show that the severity of the Eurozone crisis was worse in countries where firms borrowed more from domestic banks ("domestic bank dependence") than in countries where firms borrowed more from international banks. Eurozone banking...