2000年-ECB欧洲央行_EMU_and_banking_supervision_16页_202kb

Summary of EMU and Banking Supervision

Core Content

The introduction of the euro has significantly impacted the banking sector in the euro area, leading to increased internationalisation of banking activities and a more integrated financial market. This integration has resulted in a greater exposure of banks to cross-border risks, necessitating enhanced supervisory co-operation and a more unified approach to prudential regulation.

Main Views

• Internationalisation of Banking Activities:

  • The single currency has fostered greater integration in large-value payment systems and interbank markets, leading to more cross-border transactions and a reduction in exchange rate risk.
  • Banks are now more interconnected, with increased exposure to risks originating outside their domestic borders.
  • The Single Market for banking and financial services allows banks to operate freely across Member States, with supervision by their home-country authorities.

• Prudential Supervision:

  • Traditional banking risks still largely originate domestically, but the euro has increased the need for cross-border risk management.
  • Capital requirements have become a cornerstone of prudential regulation, with a focus on banks' internal risk management procedures.
  • The Basel Committee has played a key role in promoting international standards and co-operation in banking supervision.

• Interbank Market Changes:

  • The interbank market is dominated by unsecured contracts, which are more than 70% of the total euro area interbank market.
  • Cross-border transactions in the interbank market have increased significantly, with the share of cross-border payments rising from 36% to 41% in 1999.
  • The introduction of the TARGET system has contributed to the integration and liquidity of the euro area interbank market.

• Concentration of Interbank Activities:

  • The largest banks have a substantial share of total interbank assets and liabilities, with the market share of the top 20 institutions increasing from 31.6% to 39.4%.
  • Cross-border interbank activity is likely more concentrated than domestic activity, but the overall interbank market has become less concentrated due to the expansion of the euro area.

• Cross-Border Banking within the Euro Area:

  • Despite the integration of the euro, the majority of loans and deposits of euro area banks are still domestic.
  • Cross-border activities are more prominent in fixed income securities and capital market-related services.
  • The growth of cross-border business within the euro area has outpaced domestic growth in most areas.

• Securities Portfolio Diversification:

  • Euro area banks have increasingly diversified their securities portfolios internationally.
  • The share of domestic instruments in total fixed income holdings has declined since 1997.
  • Government bonds from other euro area countries have seen a significant increase in holdings, with a 38% rise in 1999 compared to a 6% decline in domestic holdings.

• Asset Management and Non-Traditional Activities:

  • Asset management and investment banking activities have grown, contributing to the expansion of cross-border operations.
  • These activities generate fee and commission income, not just interest income, and increase exposure to international market shocks.

• Banking Industry Restructuring:

  • The euro has encouraged the consolidation of the banking industry, leading to a clearer distinction between large, full-service banks and smaller, specialised institutions.
  • There has been a noticeable trend towards mergers and acquisitions in 1999, with significant deals involving major euro area banks.

Key Information

• TARGET System:

  • The integration of large-value payment systems within the TARGET system has increased cross-border liquidity and transaction volumes.
  • Cross-border TARGET payments accounted for over 50% of total interbank activity in 1999.

• Supervisory Co-operation:

  • The Banking Supervision Committee of the ESCB has been established to enhance co-operation between national supervisors and the Eurosystem.
  • National supervisors still play a central role, but the need for co-ordinated responses to cross-border crises is more pressing.

• Risk Exposure:

  • Banks are increasingly exposed to risks beyond their domestic borders due to cross-border activities and the integration of financial markets.
  • The structure of balance sheets has not changed significantly, but the composition of assets and liabilities has shifted towards more cross-border components.

• Growth of Cross-Border Activities:

  • Cross-border activities in the euro area have grown faster than domestic ones, especially in capital markets and asset management.
  • The trend is expected to continue as the Single Market and the euro further integrate financial services.

• Market Concentration:

  • The largest banks have a dominant share in the interbank market, but the market has become less concentrated overall.
  • The trend towards concentration has been more pronounced in smaller countries and is now also evident in larger ones.

• International Claims:

  • The international claims of euro area banks, when considering foreign affiliates, are significantly larger than those reported in residency-based statistics.
  • Around 37% of international claims are directed at other euro area countries, and 55% at other EU Member States.

Conclusion

The euro has transformed the euro area banking sector by increasing integration and internationalisation, leading to a more interconnected financial system. This has resulted in a greater need for harmonised regulatory frameworks and enhanced supervisory co-operation. While domestic risks remain significant, the growing exposure to cross-border risks highlights the importance of developing robust and coordinated supervisory mechanisms to ensure financial stability. The restructuring of the banking industry and the expansion of cross-border activities further underscore the evolving nature of banking in the euro area.