European Banking, Past, Present and Future

104 Pages Posted: 13 Jan 2003

Date Written: December 2002


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.

JEL Classification: E58, F30, G21, G38

Suggested Citation

Dermine, Jean, European Banking, Past, Present and Future (December 2002). Available at SSRN: or

Jean Dermine (Contact Author)

INSEAD - Finance ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
+33 1 60 72 41 33 (Phone)

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