European Banking: An Analysis of Competitive Conditions

  • Phil Molyneux
  • D. M. Lloyd-Williams
  • John Thornton

Abstract

Banking in the European Community is expected to experience marked changes during the coming years as a result of the completing of a single market in financial services. Price Waterhouse (1988), Neven (1990) and Vives (1991) have investigated the impact of European integration on the competitive conditions in banking and financial markets and all have shown that there are significantly different competitive conditions existing in the different country banking systems. However, only the Price Waterhouse study for the European Commission on the 'costs of non-Europe' can lay claim to be an empirical investigation of competi- tive conditions across European banking systems. The study estimated likely price falls from completing the internal market on a standard set of financial products. The possible gains from European integration were reflected in the corresponding differentials between the prices in individual countries compared with the level at which overall prices were estimated to settle when the internal market is completed. For every single product large differences were observed in prices across countries, thus implying different competitive environments1.

Keywords

Covariance Expense Rium OECD Monopoly 

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Copyright information

© Jack Revell 1994

Authors and Affiliations

  • Phil Molyneux
  • D. M. Lloyd-Williams
  • John Thornton

There are no affiliations available

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