Very low policy rates as well as the substantial redesign of rules and supervisory institutions have changed background conditions for the Euro Area's financial intermediary sector substantially. Both policy initiatives have been targeted at improving societal welfare. And their potential side...

International banking has been an important driver of financial globalisation and integration, thus contributing to welfare gains over time and across countries. During the recent crisis, however, the plight of many internationally active banks epitomised the fragility of the financial system....