European Banking, Past, Present and Future

Abstract:     
Twenty years into the integration of European banking markets, we review the impact on European banks, their customers and regulators. In Section 1, we review the history of European banking integration and the welfare benefits that have accrued to customers. In Section 2, we attempt to better understand the remaining barriers to the creation of a truly single European banking market. In particular, we analyse the economics of international bank structure: branches vs subsidiaries. The raisons d'etre of the many bank mergers that took place between 1990 and 2002 are reviewed in Section 3. Finally, in Section 4, we address three public policy issues raised by the process of consolidation: investor protection, banking supervision in international banking, and the impact on competition and stability.

Number of Pages in PDF File: 104

JEL Classification: E58, F30, G21, G38

working papers series