EU could follow Lincoln’s model on dual banking

Published in the Financial Times.

Sir,

When looking at the difficulties of European banking union (“Eurozone banking union heads towards ‘critical phase’”, April 11), perhaps a model to explore is that created by the US during the administration of Abraham Lincoln.

The National Currency Act of 1863, now known as the National Banking Act, created banks chartered by the federal government. These new “national banks”, regulated by the national comptroller of the currency, existed and still exist alongside the “state banks” chartered by the individual US states. Thus we got the dual banking system.

Might the EU similarly think of a dual banking structure, with some banks chartered and regulated by the EU, and others remaining chartered by the individual member states?