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The Case for a European Banking Charter

36 Pages Posted: 23 Aug 2007  

Jörg Decressin

International Monetary Fund (IMF)

Martin Čihák

International Monetary Fund (IMF)

Date Written: July 2007

Abstract

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, Jörg and Čihák, Martin, The Case for a European Banking Charter (July 2007). IMF Working Papers, Vol. , pp. 1-34, 2007. Available at SSRN: https://ssrn.com/abstract=1007922

Jorg W. Decressin

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Martin Cihak (Contact Author)

International Monetary Fund (IMF) ( email )

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

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