Is Europe Ready for a Major Banking Crisis? Bruegel policy brief 2007/03, August 2007

Veron, Nicolas (2007) Is Europe Ready for a Major Banking Crisis? Bruegel policy brief 2007/03, August 2007.

Abstract

Summary. Europe’s banks have long been slow to integrate across borders, but this is changing fast. ‘Pan-European banks’, whose activities span several EU countries, are rapidly emerging, and are likely to enhance the overall contribution of financial services to economic growth. Meanwhile, financial stability arrangements, notably banking supervision, remain nationally anchored. This creates significant risks in the event of a crisis involving a pan-European bank. Faulty cross-border coordination and diverging national views could seriously hamper the ability of the authorities to respond speedily and effectively to an unfolding financial crisis.