Notably, regulatory control for a country’s banking industry resides with its regulators. This makes coordinated action difficult, as was evidenced in the recent discussions regarding bailing out the industry from the financial crisis.

• Consolidation
  
  Estimates by the European Central bank suggest that the number of credit institutions in the EU-15 decreased by 28% from 9,624 in 1997 to 6,926 in 2006. Consolidation has been the hallmark of the European banking industry driven primarily by a search for a newer customer base and, higher efficiencies and scale. Examples of cross-border European deals are HSBC’s acquisition of Credit Commercial de France, Barclays’ acquisition of Banco Zaragozano, Unicredit’s acquisition of HVB and Santander’s acquisition of Abbey National.
  
  According to analysis by a reputed analyst firm, one-third of the number of bank Merger & Acquisition deals in Europe over the last 10 years have involved banks in Western Europe acquiring all or part of banks in ‘emerging’ Europe, Central and Eastern Europe (CEE), the Commonwealth of Independent States (CIS), the Baltic States and Turkey. This was enabled by the privatization programs in these emerging countries that allowed Western European banks to enter the markets through the acquisition of state owned banks.
  
  Merger activity is expected to continue as banks further consolidate their positions and weaker banks succumb. Recently the credit turmoil saw the unexpected acquisition of HBOS by Lloyds TSB. Hectic M&A was also witnessed in the German banking industry.

• Internationalization
  
  Internationalization is a prominent feature of the European banking industry as banks look for growth and opportunities to diversify. Apart from global players such as Citigroup which has a significant presence throughout Europe, ICICI Bank (India) and numerous Chinese and Islamic banks have been targeting Europe. European banks themselves have been going outwards to emerging markets of India, China, Africa and Latin America either through acquisitions or by setting up direct operations Santander for instance, has been very active in acquiring banks in Latin America. The highly attractive US banking market has been a target of acquisitions as well. Firms such as Deutsche Bank, HSBC, BNP Paribas and HSBC have made strategic acquisitions in the US over the past decade.