The Case for a European Banking Charter
36 Pages Posted: 23 Aug 2007
Date Written: July 2007
Most financial institutions in the European Union (EU) are still based in one country, but a number of large financial institutions (LCFI) have systemic cross-border exposures. The paper explains how, despite much progress, nationally-segmented supervisory frameworks and national accountability for financial stability hinder optimization across borders of banks' operations and efficient and effective LCFI supervision. A full-fledged EU-level prudential regime that operates along-side national regimes -- a European Banking Charter (EBC) -- could harness market forces to establish a level playing field for financial sector competition, while plugging some significant gaps in Europe's financial stability framework without concentrating excessive powers.
Keywords: Working Paper, Banking, Europe, Financial systems, European Union, Financial stability
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