Working Paper

Cross-Border Banking and Transmission Mechanisms: The Case of Europe


  • Buch
  • C.M.
Publication Date

International activities of commercial banks are a potential source for the transmission of shocks across countries. In Europe, bank finance plays a relatively important role, and efforts have been made at creating a level playing field for financial institutions. This paper reviews the stylized facts of the integration of European banking markets and the changing nature of cross-border banking. Although the openness of financial systems has increased, bilateral financial linkages among EU countries remain relatively small. The exception are claims of German banks on a number of smaller countries, and we use these data for an analysis of the determinants of cross-border lending patterns.


JEL Classification
F36, F42, G15

Key Words

  • cross-border banking
  • Europäische Integration
  • European integration
  • transmission of shocks