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Banker, The, February, 2008

Byline: HEATHER MCKENZIE

By 2018, a mere 10 western European banks will manage 80% of continental Europe's financial services business, according to financial services consultancy TowerGroup - a dramatic fall from the 200 to 300 banks that currently manage such volumes. "Margins in the financial services industry are now so low that the only way for financial institutions to survive is to improve economies of scale," says Ralph Silva, senior analyst, European banking and payments at TowerGroup. "The subprime crisis will also drive banks to specialise in their core functions - those strong in investment banking will acquire other investment banks but will divest non-core activities such as retail credit cards."

The accepted way to improve economies...

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