In its White Paper on Financial Services Policy 2005-2010, the European Commission highlighted the significant potential for increased efficiency and growth of the EU economy which as a result of freeing competition in EU financial markets and achieving a truly single market in financial services. EU financial services firms should have a wider market for their goods and services, which should help to improve productivity, customer service and choice. Larger and more diversified financial institutions should be better able to mitigate risks associated with their business and possible financial market shocks, enjoy greater economies of scale, and should be better able to compete globally. Finally, the realisation of a truly single market for financial services in the EU is a crucial cornerstone of the Lisbon Strategy to promote growth and employment in the EU economy.

The Commission’s stance on promoting cross-border consolidation has helped contribute to an increase in the number of European deals completed, for example ABN-AMRO-Banca Antonveneta, Santander-Abbey National, Unicredito-Hypovereinsbank and BNP Paribas-BNL. However, consolidation in financial services remains well below levels experienced in other economic sectors.