Banking supervision in Europe and economic and monetary union
By: BEGG, Iain
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Contributor(s): GREEN, David.
Material type: 
ArticlePublisher: London : Routledge, September 1996Journal of European Public Policy 3, 3, p. 381-401Abstract: The Treaty on European Union assigns responsibility for monetary policy to the European tier of government. This has major implications for the regulation and prudential supervision of banks. However, the assignment of these responsibilities was left ambiguous by the Treaty. As banking is a critically important part of the economic infrastructure, this is a matter of significant public policy concern. This article outlines the three major identifiable approaches which may be taken towards the future regulation and supervision of banking in the European Union (EU). A discussion of the reasons for such regulation and prudential supervision is followed by an assessment of recent relevant experience. The very substantial economic costs of poorly designed regulation and inadequate supervision arc illustrated. After a detailed discussion of the case for increased involvement of the EU tier of government in this sphere, the article concludes that the case for such a development is becoming increasingly compelling.
The Treaty on European Union assigns responsibility for monetary policy to the European tier of government. This has major implications for the regulation and prudential supervision of banks. However, the assignment of these responsibilities was left ambiguous by the Treaty. As banking is a critically important part of the economic infrastructure, this is a matter of significant public policy concern. This article outlines the three major identifiable approaches which may be taken towards the future regulation and supervision of banking in the European Union (EU). A discussion of the reasons for such regulation and prudential supervision is followed by an assessment of recent relevant experience. The very substantial economic costs of poorly designed regulation and inadequate supervision arc illustrated. After a detailed discussion of the case for increased involvement of the EU tier of government in this sphere, the article concludes that the case for such a development is becoming increasingly compelling.
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