Open Economies Review

, Volume 7, Issue 3, pp 183–198 | Cite as

Bank cooperation and banking policy in a monetary union: A political-economy perspective on EMU

  • Hans Peter Grüner
  • Carsten Hefeker
Article

Abstract

Why do large European banks lobby for monetary union? We show in a game-theoretic model that montary union can trigger a change in the structure of the market for international banking transactions with asymmetric effects on profits: large banks are induced to cooperate internationally and gain from European Monetary Union (EMU), while small banks are likely to lose. Monetary union can be interpreted as a device for large banks to push small banks out of the market for cross-border financial services.

Key words

European Monetary Union interest groups banking policy bank cooperation 

JEL Classification Numbers

E5 F3 G2 

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Copyright information

© Kluwer Academic Publishers 1996

Authors and Affiliations

  • Hans Peter Grüner
    • 1
  • Carsten Hefeker
    • 2
  1. 1.Department of EconomicsUniversity of BonnBonnGermany
  2. 2.Centre for European Policy StudiesBruxellesBelgium

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