The IBAN account numbers we use in Europe have a 2 digit checksum against errors (mod-97 - see http://en.wikipedia.org/wiki/International_Bank_Account_Numb... ). Banks are also not allowed to charge more for inter-EU transfers than for national ones, so in most cases transfers are free (because they are free within the country).

The banks didn't do this willingly, they were forced to by the EU.