| "Every bank in Europe is contemplating its strategy right now, which is a euphemism for saying they are all thinking about either buying other banks or of being bought themselves," says Keith Brown, head of the financial institutions group (FIG) at Morgan Stanley International in London. Morgan Stanley's FIG team is the largest group of investment bankers within the firm devoted to any one industry sector. That's typical of the major investment banks. Partly because there are so many banks in Europe, partly because banks are such active issuers of debt and equity, investment banks traditionally have had more people covering banks than any other industry sector. But, increasingly, it is also because of the prospects for M&A deals. Dozens of would-be M&A deal-makers are scurrying around Europe, pitching all manner of acquisitions, sales and mergers to their commercial and retail banking clients. These are touted as the solution to a series of serious challenges which are preying on the minds of Europe's top bankers: low economic growth and weak loan demand which will make it hard for banks to grow their earnings; the requirement for massive investment in technology; strong competition from other banks and non-bank financial services providers; the imminent creation of a single currency bloc. |