Efficiency and Stability in EU Banking - Statistics Project Example

The paper “Efficiency and Stability in EU Banking” is an informative example of a finance & accounting statistics project. The development of a stable and efficient financial system is noted to be a critical ingredient that is necessary for the growth or economic development of a given region. Prior to the start of the credit crisis in late 2007, European banking markets have been growing integrated (Green and Petrick, 2002). Under the twin impact of technological advances and deregulation, the banking industry in Europe was noted to experience an unprecedented degree of financial integration and competition.

The EU has in recent years experienced sharp growth in the number of multinational banks that are seen to be operating within the region. The increasing scale of global interconnectedness is seen to have triggered some serious concerns pertaining to their potential effect on the banking system and especially so in respect to the stability and efficiency of these banking systems. It has been argued that low levels of stability and efficiency at these banks is illustrated by the fact that most of the banks that had to either be supported or bailed by their governments in Europe and the United States using public funds during the height of the financial crisis in the period ranging 2008-2009 were multinational banks.

To aid in guaranteeing that these banks will continue to maintain high levels of stability and efficiency, there have been a series of proposals advocating for increased supervise and regulation within the EU’s financial market. It can be observed that these proposals seek to support the development of special prudential and supervisory mechanisms for these banks. 1.2 Background of the StudyThere is a broad consensus in the literature that the development of such as system in the banking sector of a country or region plays a critical role in guaranteeing efficient allocation of real economic resources across space and time as well as helping to promote the efficient management of wealth and capital accumulation.

In most developed countries, banks and other financial institutions are noted to play an essential role in the process of asset allocation.