When the decision was made two months ago by the boards of Sweden's Svenska Enskilda Banken (SEB) and Förenings Sparbanken (Swedbank) to abort their proposed merger, the recriminations were swift. The banks blamed the European Commission for imposing penal conditions that wrecked the logic of the deal, one of Sweden's largest.
But Brussels shrugged off such criticism, pointing out that the suitors failed even to wait for the final conditions to be negotiated. Could it be that the banks had repented of their marriage and were mightily relieved for an excuse to split?
The case raises thorny competition policy issues. Not least is the continued relevance of the notion of monopoly in smallish national markets when the talk among finance ministers is of creating a mighty single market in financial services within the EU by 2005.
At the outset, the boards of the two banks had seen themselves as an ideal fit, combining SEB's strength in Sweden's corporate market with Swedbank's expertise in the small- and medium-sized enterprise and retail sectors. The institutions also believed the merger would give them an excellent foundation for expansion in the Nordic and Baltic regions and provide a strong revenue base for investment in business expansion.