Trans-European Retail Banking: Challenges to New Entrants and Integration in European Retail Banking
AbstractPolicy makers continue to be concerned by the lack of integration in European retail banking. Regulatory harmonisation may reduce entry costs, but is unlikely to stimulate enough cross-border competition to bring visible consumer benefits. Competition that fosters real cross-border integration is more likely to be triggered by an outsider that introduces qualitatively different services, business models and technologies to what is still a fairly static, concentrated market structure. This paper discusses the advantages and persistent challenges a new entrant would face if it were to attempt to develop a compelling cross border retail banking service in Europe.Given Brussels' stated preference for a market-led process of integration, single market policy should focus more on removing barriers to innovative new entrants than on efforts to harmonise rules based on existing business models. Competition authorities should be supported in their investigations into regulatory and commercial restrictions on access to payment networks and systems. Further steps towards an EU supervisory authority may also help reduce regulatory uncertainty that weighs disproportionately on banks seeking to introduce new pan-European business models.
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Bibliographic InfoPaper provided by Regulation2point0 in its series Working paper with number 341.
Date of creation: Jun 2006
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