Level The Field For Europe's Banks

The European Union claims to have a single market for financial services for all of Europe. But the privileges enjoyed by public-sector banks, notably Germany's state-backed Landesbanks, makes a mockery of the claim. Because they have unlimited state guarantees, the Landesbanks have much better credit ratings than private banks even though their balance sheets are generally in far worse shape. That means they can raise money more cheaply than their privately owned competitors and lend it far more aggressively.

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