This paper examines the main structural and performance features of European banking. It demonstrates that while banking markets have become increasingly concentrated and bank numbers have fallen, competition appears to have intensified. Given the large number of banks and branches in many countries, there still remain indicators of possible excess capacity in the system and that the consolidation trend, especially with the advent of the EMU, will continue. The paper considers ways in which banks have diversified to add to their revenues, and also discusses market power and competition issues relating to increased market concentration. Finally, we briefly discuss the foreign expansion strategies of European banks, particularly the Spanish banks in South America. The strategic emphasis of the top Spanish banks has primarily been based on building market power and a name presence in a region that has massive market potential.

Banking consolidation, European banks, Foreign bank expansion,
Latin American Business Review
Erasmus Research Institute of Management

Ibanez, D.M, & Molyneux, P. (2002). Financial restructuring in European banking and foreign expansion. Latin American Business Review, 3(4), 19–57. doi:10.1300/J140v03n04_03