EECS 1541 Lecture Notes - Lecture 27: Single European Act, Basel Ii
23 Jun 2018
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EECS 1541 Lecture 27 Notes
Introduction
Regulations in the Credit Market
Borrowers are therefore strongly encouraged to repay syndicated loans promptly.
From the banks’ perspective, syndicating a loan increases the likelihood of its timely
repayment.
Regulations contributed to the development of the credit market because they imposed
restrictions on some local markets, thereby encouraging local investors and borrowers
to circumvent these restrictions.
Differences in regulations among countries allowed banks in some countries to have
comparative advantages over banks in other countries.
Yet international banking regulations have become more standardized over time, a
trend that has enabled more competitive global banking.
Three of the more significant regulatory events allowing this more competitive global
playing field are the Single European Act, the Basel Accord, and the Basel II Accord.
Single European Act
One of the most significant events affecting international banking was the Single
European Act, which was phased in by 1992 throughout the European Union countries.
Some provisions of the Single European Act of relevance to the banking industry
Capital can flow freely throughout Europe.
Banks can offer a wide variety of lending, leasing, and securities activities in the EU.
Regulations regarding competition, mergers, and taxes are similar throughout the EU.
A bank established in any one of the EU countries has the right to expand into any or all
of the other EU countries.
As a result of this act, banks have expanded across European countries.
Document Summary
Borrowers are therefore strongly encouraged to repay syndicated loans promptly. One of the most significant events affecting international banking was the single. European act, which was phased in by 1992 throughout the european union countries. A bank established in any one of the eu countries has the right to expand into any or all of the other eu countries. As a result of this act, banks have expanded across european countries. Efficiency in the european banking markets has increased because banks can more easily cross countries without concern for the country-specific regulations that prevailed in the past. Therefore strongly encouraged to repay syndicated loans promptly. From the banks" perspective, syndicating a loan increases the likelihood of its timely repayment. Regulations contributed to the development of the credit market because they imposed restrictions on some local markets, thereby encouraging local investors and borrowers to circumvent these restrictions.
