Record values of mergers and acquisitions amounted to 149 billion euros last year and outnumbered M&A activites in the United States nearly twice over.45 Nevertheless, consolidation in the financial sector was mainly limited to the domestic scene.
This might be due to the exploitation of cost reductions by trimming overlapping branch networks and excess capacity within a country and due to the gain in reputation largely confined within national borders.46 However, mergers tend to cut operating costs and reduce managerial inefficiencies and therefore might contribute to an increase in competition.47 By improving price transparency in financial services, the euro could further enhance competition among financial institutions.