| It's not clear how long it will take, but it's inevitably going to happen. Some time soon, one big European bank is going to take over another big bank from a different European country. The acquirer will argue that, with the introduction of the euro and the fast growing flow of business within the EU, a bank with a leading position in two or more major countries will be at a big advantage over its competitors. The bank will be making a big mistake. It's very tempting to think that Europe (or at least north-west Europe, particularly France and Germany) will become a single financial market. After all, large companies such as Nestlé, Unilever or ABB increasingly think of themselves as European rather than as Swiss, British, Dutch or Swedish. A single currency will certainly accelerate that process. But commercial banks do not make much money from servicing such companies. Their investment banking arms might do but, as the Wall Street firms have shown in the past five years, longstanding relationships and a presence on the ground throughout Europe don't necessarily count for much in winning this business. The banks' more profitable retail customers, however, have very little need of cross-border services (and that situation will continue, euro or no euro). |