SUSTAINABILITY OF INTEGRATED FINANCIAL REGULATION AND SUPERVISION IN THE EUROPEAN UNION.

Financial regulation and supervision are some of the most important components of the financial stability of any economy. The applied institutional framework, i.e., the model and structure of the organization of financial regulation and supervision is crucial for the overall stability as well. The first question to be addressed when choosing a model or the combinations of different structures encompasses to the decision that needs to be made regarding the integrated or the non-integrated system of financial supervision. The traditional sectoral approach for financial supervision is not that effective enough to respond to the growing trend of financial conglomeration. Consequently, the integrated regulation is increasingly present in many countries around the world. During the last two decades, the development of financial regulation is moving in the direction of institutional consolidation. The purpose of this paper is to point out the issue of choosing a model of regulation and supervision in the EU countries in the context of the development of financial conglomerates and complex integrated financial products. The research hypothesis argues that the applied model of integration of financial supervision in the EU member states meets the needs of their financial systems, which are increasingly determined by the complexity of the financial conglomerate. [ABSTRACT FROM AUTHOR]