The Harmonization of EC Banking Laws: The Euro-Passport to Profitability and International Competitiveness of Financial Institutions

The concept of the coordination of laws relating to the business of credit institutions in the European Community (EC) is examined. The basic principles of harmonization - specifically, the principles of mutual recognition and home member state control - are explained. Strong tendencies exist toward a universal banking system, growing diversification of financial services, and increasing concentration in the banking industry. EC law does not require a homogeneous banking system or identical financial services among member states. Harmonization of the banking laws should consider: 1. a minimum standard for a sound and fair banking business, and 2. harmony between regulatory laws for capital markets.