Acceso usuarios
Edward P. M. Gardener, Jon Williams, Philip Molyneux
This article carries out a review of the main structural and competitive features of the European banking sectors and of the impact caused by EMU. We show that, while banking markets have become increasingly concentrated and the number of banks and savings banks has declined, competition is getting fiercer. In view of thelarge number of these instituions and branches, many countries show signs that there is surplus capacity inthe system and that the trend towards consolidation will be meaintened, especially after the appearance of the Euro. One of the subjects discussed in this article is that market concentration and institution size are not good indicators of the strenght of the market. These is also growing evidence that the big European banks outstrip their smaller counterparts in terms of efficiency. Similarly, they also seem to benefit to a large extent from technological progress. The facts available reveal an increasing concentration in all the European banking markets in the wake of EMU. There is little evidence, however, to sugest that market structure and banking dimensions have a strong impact on cost effectiveness. Such significant strategic driving forces as deregulation and technological change are transforming the economy of the sector, bringing down barriers to acces and making markets more contestable. In view of the wide, and continually expanding, range of financial service suppliers and given the broader "national" market created by EMU and the present competitiveenvoronment, national commercial banking market concentration es becoming an aspect of antitrust policy of secondary importance. Furthermore, the subsequent integration of the banking and financial sectors will exert a pressure on the authorities to develop a more effective Pan-European supervisory structure covering the credit institutions, insurance and other financial service areas.
