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Financial Architecture

In: Designing the European Model

Author

Listed:
  • Seppo Honkapohja

    (Bank of Finland
    EEAG)

  • Frank Westermann

    (EEAG
    University of Osnabrueck)

Abstract

There has been much progress in the integration of European financial markets since the lifting of capital controls during the 1980s, the First and Second Banking Directives (1977 and 1989), the Single Market Programme and monetary union. However, the European banking market, especially in its retail sector, continues to be segmented, and many obstacles remain on the way. For example, most of the mergers and acquisitions (M&A) activity is domestic. Furthermore, the emergence of pan-European stock exchanges has been delayed for a variety of reasons, but especially because of regulatory barriers. Indeed, there seems to be growing disenchantment because of the resiliency of the obstacles to the integration of financial markets. Arguably, regulatory fragmentation constitutes the major obstacle to the integration of financial and banking markets in Europe. Questions have also been raised about the adequacy of present arrangements to preserve stability in the euro area.

Suggested Citation

  • Seppo Honkapohja & Frank Westermann, 2009. "Financial Architecture," Palgrave Macmillan Books, in: Seppo Honkapohja & Frank Westermann (ed.), Designing the European Model, chapter 11, pages 366-398, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-23665-3_12
    DOI: 10.1057/9780230236653_12
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