Table of Contents

Handbook of International Banking

Handbook of International Banking

Elgar original reference

Edited by Andrew W. Mullineux and Victor Murinde

The Handbook of International Banking provides a clearly accessible source of reference material, covering the main developments that reveal how the internationalization and globalization of banking have developed over recent decades to the present, and analyses the creation of a new global financial architecture.

Chapter 5: Competitive Banking in the EU and Euroland

Edward P.M. Gardener, Philip Molyneux and Jonathan Williams

Subjects: economics and finance, financial economics and regulation, money and banking


Edward P.M. Gardener, Philip Molyneux and Jonathan Williams 1 INTRODUCTION A burgeoning literature and much speculation have already emerged on the impact of European Monetary Union (EMU) on European banking. In this respect at least EMU follows its predecessor, the Single Market Programme (SMP). Banking in Euroland is now involved in a major and far-reaching process of structural and strategic change. The rise of Euroland is not the only important strategic driver of major changes in European Union (EU) banking, but it is certainly one of the most significant together with the impact of new technology and the heightening competitive environment. This chapter focuses on the rise of Euroland as a major integrating economic event. The chapter is organized as follows. After reviewing broad structure and performance trends in European banking (Section 2), the new strategic environment for banking is explored (Section 3). An examination is then undertaken of the impact of EU regulatory changes such as the SMP and EMU (Section 4); the specific impact of EMU on bank strategies is then considered (Section 5). Section 6 considers the kinds of competitive strategies that banks might pursue in Euroland and the general relevance of recent US experiences with bank consolidation. Section 7 concludes. 2 STRUCTURE AND PERFORMANCE TRENDS IN EU BANKING1 Increasing competition in financial services has had the result of reducing the number of banks operating in many countries and this trend is common to virtually all European banking markets. It is also apparent across di...

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