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The purpose of this paper is to review current trends in reforms of the supervisory architecture in European Union (EU) countries.

Against the background of the debate on the advisability of further centralizing prudential supervision in the EU this paper develops a study of applied institutional economics, analyzing the financial supervisory architecture of each of the 27 EU countries and assesses their degree of institutional convergence. The paper investigate whether the recent wave of reforms are leading to a convergence of the national architectures.

While the degree of supervisory convergence is low, there is no single superior model of bank supervision.

The paper contributes to the debate on convergence of supervisory architectures in EU member countries.

Describes the efforts made since 1979 by China to reform its financial system to support its emerging market economy; and the associated problems. Cites research evidence that the reforms have been inadequate and analyses 1986‐2000 national statistics to calculate three macro‐indicators of financial crisis, three measures of government permeability and some other ratios for the Chinese financial system. Identifies many weaknesses, concludes that it remains vulnerable to crisis and points out the potential dangers inherent in plans to allow foreign banks to engage in local currency businesses within the next five years.