Second, European banking supervision will make it possible to effectively identify and manage cross-border problems. This is essential because today, large banks are usually active in more than one country. The failure of the Franco-Belgian bank Dexia in 2011 is a classic example in which banking supervision with a cross-border focus could have improved crisis management.
Another example is the case of German Hypo Real Estate, which failed in 2009. Third, taking banking supervision from the national to the European level will add a degree of separation between supervisors and the banks they supervise. This will prevent supervisors from treating their banks with kid-gloves out of national interest.