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The Case for a European Banking Charter

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  • Martin Cihak
  • Jörg Decressin

Abstract

Most financial institutions in the European Union (EU) are still based in one country, but a number of large financial institutions (LCFI) have systemic cross-border exposures. The paper explains how, despite much progress, nationally-segmented supervisory frameworks and national accountability for financial stability hinder optimization across borders of banks' operations and efficient and effective LCFI supervision. A full-fledged EU-level prudential regime that operates along-side national regimes--a European Banking Charter (EBC)--could harness market forces to establish a level playing field for financial sector competition, while plugging some significant gaps in Europe's financial stability framework without concentrating excessive powers.

Suggested Citation

  • Martin Cihak & Jörg Decressin, 2007. "The Case for a European Banking Charter," IMF Working Papers 07/173, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/173
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    References listed on IDEAS

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    Cited by:

    1. Kenneth Sullivan, 2008. "Presentación proactiva del desempeño," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 130-135, Julio-sep.
    2. Uhde, André & Heimeshoff, Ulrich, 2009. "Consolidation in banking and financial stability in Europe: Empirical evidence," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1299-1311, July.
    3. Hertig Gerard & Lee Ruben & McCahery Joseph A., 2010. "Empowering the ECB to Supervise Banks: A Choice-Based Approach," European Company and Financial Law Review, De Gruyter, vol. 7(2), pages 171-215, January.
    4. Helge Berger & Carsten Hefeker, 2008. "Does financial integration make banks more vulnerable? Regulation, foreign owned banks, and the lender-of-last resort," International Economics and Economic Policy, Springer, vol. 4(4), pages 371-393, February.
    5. David G. Mayes, 2012. "Some Rules for Cross-border Banks in Europe," Chapters,in: Research Handbook on International Financial Regulation, chapter 7 Edward Elgar Publishing.
    6. Beck, Thorsten, 2010. "Regulatory Reform After the Crisis: Opportunities and Pitfalls," CEPR Discussion Papers 7733, C.E.P.R. Discussion Papers.
    7. Martin Cihak & Wim Fonteyne, 2009. "Five Years After; European Union Membership and Macro-Financial Stability in the New Member States," IMF Working Papers 09/68, International Monetary Fund.
    8. Tigran Poghosyan & Martin Cihak, 2009. "Distress in European Banks; An Analysis Basedon a New Dataset," IMF Working Papers 09/9, International Monetary Fund.
    9. Eisenbeis, Robert A. & Kaufman, George G., 2008. "Cross-border banking and financial stability in the EU," Journal of Financial Stability, Elsevier, vol. 4(3), pages 168-204, September.
    10. Banco Central Europeo, 2008. "La titulización en la zona del euro," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 136-149, Julio-sep.
    11. Nicolas Véron, 2008. "Europe’s Banking Challenge: Reregulation without Refragmentation," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(4), pages 51-59, December.

    More about this item

    Keywords

    Europe; European Union; Financial stability; Financial System; Banking Charter; banking; deposit insurance; financial institutions; level playing field;

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