Regulation, Trade Agreements, Consolidation and Integration in International Banking
While a significant proportion of deregulation of banking markets was implemented in the 1980s there was a closely associated re-regulation in the form of international banking industry accords. The European Union member states’ financial markets were principally reformed by legislation, that is, through directives and recommendations. A single European financial market is due to be in place in 2005. The principle of home country control was introduced along with the equalisation of banking activities by specifying the permitted banking activities. By allowing banks from other member states to provide commercial and investment banking services in other member states, universal banking was effectively introduced as the standard type of banking, as member states were obliged to allow their indigenous banks to provide the same range of services or they would have been at a competitive disadvantage. The North American free trade agreement, NAFTA, was signed by the United States, Canada and Mexico. A separate Annex on Financial Services was agreed as part of the Uruguay round of the General Agreement on Tariffs and Trade, GATT, in the General Agreement on Trade in Services, GATS. Along with liberalisation in trade in banking services reducing the level of barriers to market access by foreign banks and the reform of banking systems through deregulation and re-regulation there has been the accompanied process of securitisation, which has progressed the process of globalisation and integration in banking. The recent increase in mergers between and acquisition of banks within and between countries has been mostly due to the single financial market and economic and monetary union in Europe, de-regulation in the United States and de-regulation, as well as, restructuring in Japan.
KeywordsEurope Income Marketing Argentina Conglomerate
Unable to display preview. Download preview PDF.
- 4.Kashyap, A. and Stein, J., Cyclical Implications of the Basel II Capital Standards, Federal Reserve Bank of Chicago, Economic Perspectives, First Quarter 2004, p. 19.Google Scholar
- 10.Sauvé, P. and Gozales-Hermosillo, B., Implications of the NAFTA for Canadian Financial Institutions, The NAFTA Papers, C.D. Howe Institute Commentary, Number 44, April 1993.Google Scholar
- 12.Belaisch, A., Kodres, L., Levy, J., and Ubide, A., Euro-Area Banking at the Crossroads, Working Paper WP/01/28, International Monetary Fund, 2001, Table 2, p. 8 and p. 9.Google Scholar
- 14.Brewer, E., Jackson, W., Jagtiani, J., and Nguyen, T., The Price of Bank Mergers in the 1990s, Federal Reserve Bank of Chicago, Economic Perspectives, Quarter 1, 2000, p. 2, and Table 1, p. 5.Google Scholar
- 15.Gunther, J. and Moore, R., Small Banks’ Competitors Loom Large, Federal Reserve Bank of Dallas, Southwest Economy, Issue 1, 2004, pp. 9–10.Google Scholar
- 16.Amel D., Barnes, C., Panetta, F., and Salleo, C., Consolidation and Efficiency in the Financial Sector: A Review of the International Evidence, Banca d’Italia, Temi di Discussione del Servizio Studi, Number 464, 2002, p. 9.Google Scholar
- 23.Schaechter, A., Issues in Electronic Banking: an Overview, Policy Discussion Paper, PDP/02/6, International Monetary Fund, 2002, p. 4 and p. 6.Google Scholar
- 24.Global Finance, The World’s Best Internet Banks, September 2004.Google Scholar