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Deregulation and Convergence of Banking: The EU Experience

Author

Listed:
  • Paul Evans

    () (Economics Department, Ohio State University)

  • Iftekhar Hasan

    () (Rensselaer Polytechnic Institute and Bank of Finland)

  • Ana Lozano-Vivas

    () (Dpto. De Teoría e Historia Económica, Facultad CC.EE, Universidad de Málaga)

Abstract

In the last two decades, the European Union has undergone a major reduction in banking regulation. This paper investigates whether this deregulatory process was associated with increasing similarity, or convergence, of banking industries across the European Union. It reports that the deregulation at the national level and the opening of banking markets to international competition led to convergence, or greater similarity, of the banking industries’ main indicators of bank profitability or earning patterns, but not necessarily their asset-liability management practices. Overall, the deregulatory process appears to explain most of the changes that occurred in the dispersion of banking structure across the European Union.

Suggested Citation

  • Paul Evans & Iftekhar Hasan & Ana Lozano-Vivas, 2008. "Deregulation and Convergence of Banking: The EU Experience," Finnish Economic Papers, Finnish Economic Association, vol. 21(2), pages 104-117, Autumn.
  • Handle: RePEc:fep:journl:v:21:y:2008:i:2:p:104-117
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    References listed on IDEAS

    as
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    Cited by:

    1. Alin Marius Andrieş & Bogdan Căpraru, 2012. "Competition and efficiency in EU27 banking systems," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(1), pages 41-60, July.
    2. Ozkok, Zeynep, 2012. "Financial Harmonization and Industrial Growth: Evidence from Europe," MPRA Paper 58875, University Library of Munich, Germany, revised 25 Sep 2014.
    3. Andrieş, Alin Marius & Căpraru, Bogdan, 2014. "The nexus between competition and efficiency: The European banking industries experience," International Business Review, Elsevier, vol. 23(3), pages 566-579.
    4. Zeynep Ozkok, 2016. "Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 62(1), pages 1-35.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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