The Case for a European Banking Charter

36 Pages Posted: 23 Aug 2007

See all articles by Jörg Decressin

Jörg Decressin

International Monetary Fund (IMF)

Martin Čihák

World Bank; International Monetary Fund (IMF)

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

Suggested Citation

Decressin, Jorg W. and Cihak, Martin and Cihak, Martin, The Case for a European Banking Charter (July 2007). IMF Working Paper No. 07/173, Available at SSRN:

Jorg W. Decressin

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Martin Cihak (Contact Author)

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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