Efficiency Barriers to the Consolidation of the European Financial Services Industry
Allen N. Berger
University of South Carolina - Moore School of Business; Wharton Financial Institutions Center; Tilburg University - CentER
University of Kansas School of Business
Gregory F. Udell
Indiana University - Department of Finance
European Financial Management, Vol. 6, No. 4, December 2000
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.
Number of Pages in PDF File: 19
Keywords: Banks, Mergers, Efficiency, Europe, Financial institutions
JEL Classification: G21, G22, G24, G28, G34, F23Accepted Paper Series
Date posted: June 8, 2000
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