EU Banking Integration: Policy,Process And Effects

In the past 20 years, the environment of EU banking industry regulation and the supervision has had a great change, the member states separated banking industry markets began to converge to a single market gradually. According to the banking industry's essential attribute and the core definition of integration, the essay has carried on the development of the tradition industrial organization theory framework and the research contents, proposed a definition of banking industry integration and analysis framework, as integration is an elimination process of exterior barrier of entry between the member states, then conducted a synthetic study on the EU banking industry integration policy, the process and it's effects.The paper reveals that the EU banking industry policy, the framework of regulation and the supervision has obtained consummation unceasingly, the coordinated scope and the depth increased, the preliminary frame structure of banking industry regional governance be formed .The EU policy has had major impact on the member states' banking industry policy. Looking from view of the market structure, the development of economic conditions, the natural factors and also retail banking characteristics between the member states become the exterior entering barrier, which has certain influence on the integration process, member states' market concentration and competition. The related rules and regulations must be further coordinated. Looking to bank's behaviors, the cross-border M&A and conglomerates become the main form of deepening of market integration. The changes of entry mode of branch and affiliates also demonstrated that the EU banking single license policy already played the role. The EU banking industry integration strengthened the banking industry profit ability and the competitive power, reduced consumer and the enterprises funding costs and expenses, improved EU status in global banking industry rules and regulations, promoted the regional economic growth and reduced the bank system's overall risk. The retail banking rules and regulations coordination and infrastructure facilities should be strengthen, the efficiency promotion still has space. The member states' banks also have hold certain region competitive advantage over the banks from the third countrys' in the setting up of branches and affiliates ,means the effects of "squeezes out" . Also more attention should be paid to the potential risk brought by the integration, such as concentration of large scale conglomerates, the complicatded structure, the interstate bank risk spread, competition excessively between banks .The improvement and innovation of existing rules and regulations, the supervision framework should be continued.From this paper, we may also learn some basic rules and tendency of banking industry integration, which is of theory and practical significance to the China banking industry's opening ,strategy planning, and better regulation and supervision .