In principle the common market should eventually allow banks headquartered in any one partner state the “right of establishment” in each of the other partner states and allow citizens of each partner state to purchase financial services from banks in the other partner states. Precisely how the “right of establishment” will operate with respect to banking has yet to be decided.
Our analytical framework permits us to crosscheck the assessment derived from our economic analysis, which (given the current state of models and statistical tools) is more pertinent for short to medium-term horizons, with the assessment resulting from our monetary analysis, which can be especially relevant over the medium to longer term.