Retail banking in European financial integration

The aim of this study is to survey the competitive and structural effects of European finanGial integration on banking in the forthcoming European Economic Area, where legal impediments to free cross-border provision of banking services will be largely abolished by the legal measures adopted in the EC. The Single Banking Market came into being in the EC on 1 January 1993, and will be extended to inc1ude the EFTA countries when the EEA Agreement enters into force, with the exception of Swizerland, where the agreement has been rejected in a national referendum. A further aim is to comment on the potential industry-specific efficiency and welfare gains and thei! distribution across countries, which are contingent on the expected competitive and structural consequences of banking integration. These gains constitute the basic economic motive behind the Intemal Market Programme of the EC. Insurance firms and other non-bank financial institutions are exc1uded from the study.