Mergers and acquisitions are often a good solution for ailing banks and have been tossed around more frequently lately as the answer for Europe’s financial institutions, many of which are struggling with internal issues along with external factors such as anemic growth and low interest rates. While consolidation brings many benefits, it may not be the best remedy for European banks right now, especially when it involves substantial cross-border deals.
Banco Popular Español
Italy’s banking sector, mired in bad debt and low profitability, has been labelled Europe’s weakest, but fortunately it is making progress in addressing long-standing issues—with a little help from the government. Recent bank bailouts have given renewed hope to struggling lenders, while raising concerns that the arrangements conflict with Europe-wide rules prohibiting the use of taxpayer funds to bail out failing banks.