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This paper investigates the institutional set-up of European banking supervision against the backdrop of the current structure of the European banking market. The point of departure is that, in order to avoid incentive problems and white spots, the institutional structure of supervision should reflect the structure of the market under supervision. Based on different data for the largest entities, this paper seeks to determine the prime orientation of European banks: is it national, regional, pan-European or global? It is established that European banks are still primarily nationally oriented, that the number of internationally oriented banks is small and that global activities are almost as large as European ones. Moreover, these banks' European activities are shown to be clustered, reflecting different regional orientations. In the absence of substantive pan-European banks, this differentiated market structure calls for a …