Cross-border electronic banking activities in the single European market and the normative value of home country supervision

Abstract

An undiluted policy of mutual recognition and home country control is often regarded as an effective remedy to the dysfunction of the single financial area. This paper intends to support this argument. In particular, it will make the case for genuine home country banking supervision over cross-border electronic banking activities via the internet where the progress towards market integration is asymmetrical to the capabilities of network technology. Despite the clear normative value of the proposed model, however, its actual success depends on preconditions that are difficult to fulfil. No description of actual EU directives is offered.