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The European Central Bank (ECB) published a report on EU banking structures, prepared by the Banking Supervision Committee of the European System of Central Banks (ESCB). The Committee comprises of representatives of the national central banks and banking supervisory authorities of the EU and the ECB. The report reviews the main structural developments in the EU banking sector in 2004 and, where possible, in the first half of 2005. It also contains four short topical studies of syndicated lending, competition in EU mortgage lending markets, the structure of EU consumer credit markets and the internationalisation strategies of a sample of large EU banks.
The finalisation of the Basel II framework and the introduction of new International Financial Reporting Standards (IFRS), as well as the revision of some existing International Accounting Standards (IAS) were the most significant regulatory developments in 2004 and early 2005. Retail financial services and corporate governance also received some attention from regulators during the past year, as the European Commission set out its plans for the future of financial services policy in the EU and as part of amendments to governance frameworks in various countries.
Internationalisation and consolidation continued to shape developments in the banking industry in the review period, although, in recent years, this trend has been in decline. Overall, the EU banking system is becoming more integrated over time, and it is probable that competitive conditions will continue to intensify. Notwithstanding this, some important obstacles remain, the removal of which would effectively improve consumer welfare. This is particularly evident in consumer lending markets, as documented in this report.