11th February 2020

Scope says cross-border bank mergers in Europe are not such a grand idea

Scope says that many market actors see cross-border bank consolidation as a panacea for cutting costs and strengthening revenues. Euro area supervisors encourage it as a step towards a true single market. But this may not be the right step at a time when competition is mostly via digital channels and when a new open banking environment emerges, spurred by the implementation of PSD2. Acquiring new clients and offering new products through open digital platforms may be the way forward, rather than merging with or acquiring large legacy banks in other countries.

Also, national political sensitivities will continue to remain a major hurdle for full financial integration across the euro area, despite the existing regulatory and legal framework.