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Efficiency Barriers to the Consolidation of the European Financial Services Industry
Author(s) -
Berger Allen N.,
De Young Robert,
Udell Gregory F.
Publication year - 2001
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/1468-036x.00147
Subject(s) - consolidation (business) , competitor analysis , european union , currency , international economics , business , banking industry , member states , financial regulation , offset (computer science) , economics , financial system , monetary economics , finance , programming language , marketing , computer science
Cross‐border consolidation of financial institutions within Europe has been relatively limited, possibly reflecting efficiency barriers to operating across borders, including distance; differences in language, culture, currency, and regulatory/supervisory structures; and explicit or implicit rules against foreign competitors. EU policies such as the Single Market Programme and European Monetary Union attenuate some but not all of these barriers. The evidence is consistent with the hypothesis that these barriers offset most of any potential efficiency gains from cross‐border consolidation. Banks headquartered in other EU nations have slightly lower average measured efficiency than domestic banks and non‐EU‐based foreign banks.