Abstract

http://ssrn.com/abstract=1800250
 


 



Creating an EU-Level Supervisor for Cross-Border Banking Groups: Issues Raised by the U.S. Experience with Dual Banking


Larry D. Wall


Federal Reserve Bank of Atlanta - Research Department

Maria Nieto


Bank of Spain

David G. Mayes


University of Auckland

March 1, 2011

MANAGING RISK IN THE FINANCIAL SYSTEM, Raymond LaBrosse, Rodrigo Olivares-Caminal, Dalvinder Singh, eds., Edward Elgar Publishing, 2011
FRB of Atlanta Working Paper No. 2011-06

Abstract:     
The European Union (EU) has been facilitating the growth of cross-border banking groups, but bank supervision remains the responsibility of national supervisors. This mismatch has long been recognized and various proposals have been offered to address this weakness. An alternative that would retain the most important advantages of full centralization is that of centralization only for those cross-border groups that are systemically important. All other banks would remain national responsibilities. To identify some of the issues (but not necessarily the best answers) raised by partial centralization in the EU, we look to the dual banking arrangements in the United States, which has long had both federal and state charters. One issue is that of who qualifies for and/or is required to adopt an EU charter. The U.S. policy of low-cost chartering changes encourages both good and bad competition among supervisors. A second issue is that of the potential mismatch between EU responsibility for prudential supervision of some banks and national provision of deposit insurance and lender of last resort services for all banks. A third potential issue is who should provide business conduct regulation.

Number of Pages in PDF File: 27

Keywords: cross-border banking

JEL Classification: G28, F36, K23

Accepted Paper Series


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Date posted: April 4, 2011  

Suggested Citation

Wall, Larry D. and Nieto, Maria and Mayes, David G., Creating an EU-Level Supervisor for Cross-Border Banking Groups: Issues Raised by the U.S. Experience with Dual Banking (March 1, 2011). MANAGING RISK IN THE FINANCIAL SYSTEM, Raymond LaBrosse, Rodrigo Olivares-Caminal, Dalvinder Singh, eds., Edward Elgar Publishing, 2011; FRB of Atlanta Working Paper No. 2011-06. Available at SSRN: http://ssrn.com/abstract=1800250

Contact Information

Larry D. Wall (Contact Author)
Federal Reserve Bank of Atlanta - Research Department ( email )
1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-8937 (Phone)
404-498-8956 (Fax)
HOME PAGE: http://www.frbatlanta.org/econ_rd/bios/wall.htm
Maria J. Nieto
Bank of Spain ( email )
Alcala 50
Madrid 28014
Spain
David G. Mayes
University of Auckland ( email )
Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand
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