Abstract

European banking and insurance sectors are most important parts of the EU financial system. They influence the EU economy in many ways. Therefore, the EU goal of single market for banking and insurance is of the utmost importance since it enables application of common policy measures, transmission of the monetary policy, contributes to the financial stability and effective capital allocation. In our research we investigate how successful was the process of integration with help of regulation harmonization, and whether there are common properties in both sectors. We also search for traces, which could explain problems affecting both sectors and EU economy. In contrast to other studies, we apply a novel methodology and large dataset. Current results are robust and promising, and they support the idea, that structural properties can be a leading indicator of financial distress.