Do you expect there to be further consolidation in the world banking industry?
Mühlemann: The liberalization of the us financial market (eg, the introduction of interstate banking and the relaxation of the Glass-Steagall Act) has increasingly led to consolidation in commercial and investment banking. In Europe, we will see a similar development, although for different reasons. European banks, which have already entered the bancassurance era, are looking for size, whereas us banks want to get ready for the era after Glass-Steagall.
In Europe I see two forces at work: the ongoing shake-out within the different national financial markets and the coming European-wide consolidation with regard to the introduction of the euro. In fact, national markets will become less and less important as currency-borders disappear. In this sense the euro can be regarded as a catalyst. As a result, the market will be carved up among the few truly global financial players, even though there will be room for smaller banks to focus on niches.
The recent Asian financial crisis will unquestionably lead to a consolidation of the financial services industry there. Asian banks will have to reduce overcapacity by merging with other competitors or closing down their operations.