IDEAS home Printed from
   My bibliography  Save this paper

Financial Supervision in an Integrating Europe: Measuring Cross-Border Externalities


  • Sander Osterloo
  • Dirk Schoenmaker


Against the backdrop of an integrating Europe, the debate on the need for European arrangements for financial supervision and stability is intensifying in the literature as well as in the policy arena. While there is a consensus that the need for European arrangements ultimately depends on the intensity of cross-border spill-over effects or externalities within the EU, there has been no attempt to measure these cross-border externalities. The aim of this paper is to fill this gap. A new data-set on cross-border penetration (as a proxy for cross-border externalities) of large banking groups is collected. It is found that cross-border penetration within the EU is currently limited: only seven banks out of the sample of 30 large EU banking groups are considered to be ‘European’ banks that have the potential to pose significant cross-border externalities. However, aggregate data show a gradual, though statistically significant, increase of cross-border penetration in the EU. Policy-makers may thus in the (near) future face the challenge of designing European structures for financial supervision and stability.

Suggested Citation

  • Sander Osterloo & Dirk Schoenmaker, 2004. "Financial Supervision in an Integrating Europe: Measuring Cross-Border Externalities," FMG Special Papers sp156, Financial Markets Group.
  • Handle: RePEc:fmg:fmgsps:sp156

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fmg:fmgsps:sp156. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The FMG Administration). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.