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In my view this is the only reasonable way of dealing with cross-border problems without rolling back financial integration. Recent development of cross-border banking The structure of the financial services industry has gone through major changes over the past decades. Until some twenty years ago, banks were essentially national entities with  1  In terms of lending the Swedish banks’ market shares account for 80 per cent in Estonia, 53 per cent in Latvia and 60 per cent in Lithuania. 2  National Bank of Greece, Annual Report 2009. BIS Review 82/2010  15  most of their activities limited to their home market. Of course, many banks conducted international operations even earlier than this, but those operations primarily focused on wholesale markets and large corporate clients. Smaller companies and consumers have in principle been obliged to use the services offered by domestic banks. Today, banks run businesses across the globe. And through the existence of foreign-based branches and subsidiaries consumers can choose to buy services from banks that are headquartered in a completely different part of the world. The trend towards more cross-border banking is widespread, but much of the development is driven by large financial institutions in a few countries, notably the US, the UK, France, Germany, Japan and the Netherlands. 3 It has become an especially widespread phenomenon in Europe.