The Case for a European Banking Charter

July 1, 2007

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Martin Cihak, and Jörg Decressin. The Case for a European Banking Charter, (USA: International Monetary Fund, 2007) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Banking, Competition, Deposit insurance, Financial crises, Financial markets, Financial sector policy and analysis, Financial sector stability, Solvency

Keywords: Banking Charter, Competition, Deposit insurance, EBC proposal, EBC regime, EU country, Europe, European Union, Financial institution, Financial sector stability, Financial Stability, Financial System, Insolvency regime, LCFI host country activity, Member state, Prudential regime, Solvency, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/173
Stock No:

WPIEA2007173
ISBN:

9781451867374
ISSN:

1018-5941

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