The failure of numerous US regional banks revived stability concerns despite a tighter framework.
The collapse of Lehman Brothers in 2008 triggered a series of mergers and acquisitions inside the banking sector.
The takeover of Credit Suisse by rival UBS in March, arranged in haste by Swiss authorities, shows that a key lesson of the Lehman Brothers collapse was indeed learned: some banks are indeed “too big to fail” as that would cause shockwaves not only through the banking sector but the wider economy. During the months of September and October 2008, Bank of America bought Merrill Lynch for US$50 billion, BNP Paribas took control of Fortis in Belgium and Luxembourg for US$20.3 billion, Lloyds snapped up Halifax-Bank of Scotland for US$12.2 billion, and Santander took over the banking network of Britain’s Bradford & Bingley after it was nationalised.
Europe saw less consolidation than the US, where the “crisis was an opportunity for the US government to restructure the banking sector”, said Musca.