Reshaping the Banking Sector in Europe
Abstract
The European banking sector has been under strategic stress for a long time. The paper seeks to find the path that the banking sector in Europe has taken. Also, the paper tries to identify the causes of this significant changes. 6.683 transactions of merger and acquisitions are analysed. Six dimensions of the data were used to give answers to six questions. To answer these questions two approaches have been used. The first approach is a simple pivot table analysis and graphs. The second approach is cluster analysis using Stata (kmeans with (Dis) similarity measure mixed and five (5) groups to be identified). The analysis show that there is a dynamic evolvement through the last two-three decades that created a new market structure. This dynamic is both market and politically driven. The stability of this new structure remains as a question due to the fact that the market is till changing. The banking sector is still consolidating with two distinct characteristics. The first one is the increase of the percentage acquired and the second is the fact that although the trend of consolidation is pan-European, in some countries this trend is even stronger. The fragmented banking system is converging (not yet converged) to a new paradigm to form a new market structure. Finally, the market for corporate control in the banking sector in E.U. seems to react to environmental stimuli.