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The Case for a European Banking Charter

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  • Martin Cihák
  • Jörg Decressin
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    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.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/173.

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    Length: 34
    Date of creation: 01 Jul 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/173

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    Related research

    Keywords: European Union; Financial stability;

    This paper has been announced in the following NEP Reports:

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    Cited by:
    1. Helge Berger & Carsten Hefeker, 2008. "Does financial integration make banks more vulnerable? Regulation, foreign owned banks, and the lender-of-last resort," International Economics and Economic Policy, Springer, vol. 4(4), pages 371-393, February.
    2. Eisenbeis, Robert A. & Kaufman, George G., 2008. "Cross-border banking and financial stability in the EU," Journal of Financial Stability, Elsevier, vol. 4(3), pages 168-204, September.
    3. Beck, Thorsten, 2010. "Regulatory Reform After the Crisis: Opportunities and Pitfalls," CEPR Discussion Papers 7733, C.E.P.R. Discussion Papers.
    4. Martin Cihák & Wim Fonteyne, 2009. "Five Years After: European Union Membership and Macro-Financial Stability in the New Member States," IMF Working Papers 09/68, International Monetary Fund.
    5. Uhde, André & Heimeshoff, Ulrich, 2009. "Consolidation in banking and financial stability in Europe: empirical evidence," IWQW Discussion Paper Series 02/2009, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
    6. Beck, T.H.L. & Todorov, R.I. & Wagner, W.B., 2012. "Supervising Cross-Border Banks: Theory, Evidence and Policy (Revised version of CentER Discussion Paper 2011-127)," Discussion Paper 2012-059, Tilburg University, Center for Economic Research.
    7. Banco Central Europeo, 2008. "La titulización en la zona del euro," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 136-149, Julio-sep.
    8. Tigran Poghosyan & Martin Cihák, 2009. "Distress in European Banks: An Analysis Based on a New Dataset," IMF Working Papers 09/9, International Monetary Fund.
    9. Kenneth Sullivan, 2008. "Presentación proactiva del desempeño," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 130-135, Julio-sep.
    10. Nicolas Véron, 2008. "Europe’s Banking Challenge: Reregulation without Refragmentation," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 9(4), pages 51-59, December.

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