Scale versus specialization: banking strategies after the euro

The euro will transform the competitive landscape of European banking. This paper discusses some of the strategic effects of the euro on banks. In particular, it explores two questions: the rationale behind mergers and acquisitions and the universal banking model. The strategic analysis of the forces for change in banking leads to some conclusions: scale will not be the key success factor in European banking, the euro will increase the role of financial specialists in Europe and the universal banking model will face numerous challenges in the new context.