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Post-Crisis Reversal in Banking and Insurance Integration: An Empirical Survey

Author(s): Dirk Schoenmaker

Post-Crisis Reversal in Banking and Insurance Integration: An Empirical Survey pdf(914 kB) Choose translations of the previous link 

Summary for non-specialistspdf(36 kB) Choose translations of the previous link 

This empirical essay reviews post-crisis integration in banking and insurance. Looking at aggregate data, we find that cross-border banking flows have been reversed, in particular into the CESEE and peripheral counties (Portugal, Ireland and Greece). But data at the individual firm level for banks and insurers indicate that cross-border activities remain persuasive within Europe. This intensity of cross-border activities indicates that the potential for coordination failure among national authorities remains high. Host country supervisors have so far responded by ring-fencing activities in subsidiaries, leading to further fragmentation. This essay argues that if we want to keep the benefits of both the single financial market and financial stability, we need new supranational institutions that encourage integration. The advance to Banking Union with integrated supervision and resolution can provide the necessary policy push for an integrated approach.

(European Economy. Economic Papers 496. April 2013. Brussels. PDF. 42pp. Tab. Bibliogr. Free.)

KC-AI-13-496-EN-N (online)
ISBN 978-92-79-28578-3 (online)
doi: 10.2765/43662 (online)

JEL classification: G21, G22, G28, H41

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author’s alone and do not necessarily correspond to those of the European Commission.

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