Reluctant Europeans? British and French Commercial Banks and the Common Market in Banking (1977–1992)

More than ten years after the financial crisis, the challenges of European banking and of the eurozone highlight that the existence of a European common market in banking is at best partial. Examining how British and French commercial banks and banking associations responded to the plans for a European common market in banking between 1977 and 1992, this article contributes to explaining this partial character, and highlights that this project was primarily political. This challenges the widely held view that large companies tended to push for more integration. This article shows that until the mid-1980s, the banking sector was not necessarily calling for European financial integration in the form of a common market in banking for at least three reasons: they doubted the usefulness of such a move, they feared an increase in regulation, and they focused more on domestic or global matters than on European ones.

CMU and the Deepening of Financial Integration

The integration of capital markets in the EU is a long-term and complex task that is far from being completed. A comparative analysis with capital markets integration and development in the United States can offer insights on how the EU can develop its policy framework to achieve a single market for capital. This chapter begins with a brief review of the history of European financial integration policies since its inception in 1957. It then illustrates how capital markets can provide significant risk absorption against exogenous shocks. Finally, it presents a brief overview of the United States' economic history between 1860s and 1930s. Analogies can be found with the European financial integration process, as well as benchmarks to identify areas where European policies can do more to promote a Single Market for capital.

Durability and Change in Financial Systems

Historical institutionalism features extensively in the study of banking and financial regulation in Europe. This chapter reviews scholarship that explicitly, implicitly or inadvertently draws heavily on that tradition’s central tenets. The authors find that historical institutionalism can help explain the emergence, persistence, and evolution of distinct kinds of financial systems in Europe, as well as the pattern and effects of European financial integration. However, they find there is considerable untapped potential for historical institutionalism as an analytical approach for studying European financial market integration and regulation.