Banking Integration, Bank Stability, and Regulation - Introduction to a Special Issue of the International Journal of Central Banking

The link between banking integration and financial stability has taken center stage in the wake of the current financial crisis. To what extent is the banking system in Europe integrated? What role has the introduction of the common currency played in this context? Are integrated banking markets more vulnerable to contagion and financial instability? Does the fragmented regulatory framework in Europe pose special problems in resolving bank failures? What policy reforms may become necessary? These questions are of considerable policy interest as evidenced by the extensive discussions surrounding the design and implementation of a new regulatory regime and by the increasing attention coming from academia. This special issue presents five papers that attempt to address these questions from different angles. The papers were presented at the 2nd ZEW Conference on Bank Regulation – Integration and Financial Stability that took place on October 29–30, 2007, at the Centre for European Economic Research (ZEW) in Mannheim, Germany. The conference was organized by Claudia Buch (University of Tübingen), Reint Gropp (European Business School), and Michael Schroeder (ZEW).