In the European Economic Area the home country regulates the actions of its banks, wherever they may be functioning via branches or across borders, even though the host nation deals with the steadiness of its financial system and issues stemming from failure or distress. In this report we deal with 2 significant challenges linked to the conduct and co-ordination of these 2 responsibilities. First, the introduction of the euro as well as the elimination of other sorts of regulatory hurdles is possibly to cause increasing internationalization of banking……
In particular in smaller sized countries, huge portions of the banking sector may perhaps be monitored by other ‘home’ authorities. This will likely make challenging assessing what exactly is going on in the industry as a whole and cautioning about emerging systemic issues. Home supervisors will find it tough to cover the widening range of international locations in which their banks operate. Improving the info exchanged and co-operation between supervisors could be useful, but focusing public disclosure by banks to allow market discipline to supplement the work of the authorities would help overcome the issue of information significantly, furthermore to the favourable influence on incentives to banks for smart risk management. Next, the interests of home and host supervisors in a crisis could differ and require to be co-ordinated. What exactly is crucial to the host authority in a small country might be inconsequential to the home supervisor of a multinational bank in a sizeable country. Co-ordination at European level could possibly help….
Modern day economies make use of a wide assortment of means of payments. Probably the most extensively used payment instruments these days are currency, payment orders, cheks debit cards and credit cards…..
Source: Research Discussion Papers, Bank of Finland