One of the most significant events affecting international banking was the Single European Act, which was phased in by 1992 throughout the European Union (EU) countries. The following are some of the more relevant provisions of the single European Act for the banking industry:
- Capital can flow freely throughout Europe.
- Banks can offer a wide variety of lending, leasing, and securities activities in the EU.
- Regulations regarding competition, mergers, and taxes are similar throughout the EU.
- A bank established in any one or the EU countries has the right to expand into any or all of the other EU countries.
As a result of this act, banks have expanded across European countries. Efficiency in the European banking markets has increased because banks can more easily cross countries without concern for country-specific regulations that prevailed in the past.