Nicolas Véron argues that Europe‘s arrangements for financial stability have been rendered inadequate by the emergence of ‘pan-European banks‘, whose activities span several EU countries. In the event of failure of a pan-European bank, voluntary coordination between national authorities would be unlikely to lead to decisions that best serve Europeans‘ collective interest. The policy brief suggests a two-tier framework in which the challenges posed by pan-European banks are addressed with EU-level prudential arrangements and institutions, while most banks remain covered by the current national supervisory systems.