The average market share of foreign branches and subsidiaries established by banks from EU countries was 10% at the end of 2000, which is definitely not negligible. Also, the ownership structure of the banking sector is changing significantly. It is no longer true that only Luxembourg's banks have a significant proportion of capital owned by foreigners. In Ireland, Belgium and Portugal, and in the Nordic countries, the percentage of banks' capital in foreign hands ranges from around 40% to some 20%. France, Italy, Spain and Austria also show ratios of between 15% and 10%. For many large European banks, the holdings of stakes in other large players is sometimes associated with joint ventures in specific business lines or geographic areas – for example, in accession countries. Looking at the strategies of individual banks, some banks have already developed strong multi-country operations in the retail field. For instance, two major banking groups have retail activities in more than five EU countries. In any case, if the integration of the retail markets proceeds, more such operations could be expected to emerge. Integration could also be advanced via electronic banking, or crossborder lending, both of which are still relatively limited. In fact, e-banking could represent a forceful boost to integration, since it could allow customers to access banking services offered by banks in other countries, or it could be a powerful way to enter a new market without the need to establish a costly branch network.

In addition, the ECB and the Federal Reserve Bank of New York negotiated a US dollar/euro swap agreement on 12 September. The purpose of the agreement was to channel US dollar funds to European banks, which are not counterparties of the Federal Reserve for its discount window operations. European banks faced difficulties in raising short-term US dollar funds due to the disruption in the US financial system. Second, as to the co-operation between central banks and banking supervisors, the ECB, the national central banks and the banking supervisory authorities of all EU countries have recently signed a Memorandum of Understanding. It establishes arrangements for co-operation and sharing information with respect to risks in large-value payment systems. Third, as regards banking supervisors, the EU Economic and Financial Committee has recently reached the conclusion – also endorsed by the finance ministers – that, while the existing institutional arrangements for supervision and crisis management are adequate, cross-border co-operation needs to be fostered. The co-operative bodies of banking supervisors in the European Union – the Banking Supervision Committee of the ESCB and the Groupe de Contact – are currently addressing this recommendation. The opinion of the ECB is also that the existing arrangements can provide an adequate and flexible basis for safeguarding financial stability at the European level. We have also stressed that co-operation needs to be enhanced in order to ensure the effective execution of prudential supervision and corrective action in crises. For the single monetary policy, it is important that financial stability is effectively maintained.