Evaluating Long-term Performance and Risk of European Banks After Global Financial Crisis

This study examines the long-term effects of government interventions in European banks during the Global Financial Crisis. Using panel data from 2009–2019 and propensity score matching, we compare 34 intervened banks with 31 non-intervened peers. Results show that intervened banks experienced weak loan growth, reflecting balance sheet repair and regulatory constraints. While net interest margins were unaffected, overall profitability declined due to persistent operational inefficiencies. Moreover, intervened banks displayed higher risk-taking through reliance on non-interest income, confirming a “gambling for resurrection” strategy. The findings highlight trade-offs of intervention: short-term stability at the cost of long-term growth and stability.