Universal Banks and the European Banking System

Changes that derive from financial liberalisation in a competitive environment constitute one of the major points of dicussion in the debate on European Integration. The aim of The first section presents the similarities and differences between European countries and describes how evolution towards a unified banking system will be possible. Section 2 gives an overview of the arguments in favour of universal banks. Section 3 critically evaluates these arguments in favour of universal banks. Section 3 critically evaluates these arguments. In particular the predominance of universal banks over any other form of institution is tested. The last seciton concludes by considering the future position of universal banks. One option could be a more adequate equilibrium between banking institutions in order to preserve the potential advantages of universal banks without being completely exposed to the disadvantages.