Do you expect further consolidation in the world banking industry?
Breuer: The trend towards consolidation in banking _ as in other sectors _ will continue worldwide. Depending on their present positioning in the market and their defined targets in core business fields, banks will try to gain market share with acquisitions in the financial services sector in order to achieve economies of scale and stay competitive in the global market. The growing internationalization of some types of banking business and the liberalization trends in most countries are causing many banks to form bigger units. In Europe there is also Emu as a spur to banks to plan in European dimensions.
The main idea behind forming bigger financial service providers with stronger capital resources is to achieve either cost synergies, or service and product diversification in and outside traditional markets. The second alternative is certainly the bigger challenge in business terms.
Will there be large-scale cross-border - as well as domestic - bank mergers?
Breuer: Mergers will probably take place primarily nationally at local and regional level _ in Germany mainly in one category of bank or another _ in order to achieve critical mass and expand presence in certain regions.