Since the global financial crisis, European banks have decreased their risk profiles. The loan-to-deposit ratio (LDR), the key metric for assessing liquidity, has declined from 127.15% at the end of June 2015 to 104.8% in the third quarter of 2022.
The decline suggests that loans and deposits in Europe are now evenly matched, which translates to a lower probability of a funding gap and credit risk.
