Effects of EU ¯nancial integration on banking con¯gurationand coordination strategies - Propositions and evidence

EU financial integration is at an advanced, yet incomplete stage. This paper furtherlinks and contributes new insights to a) the financial integration, and b) the strategyliterature strands. The research develops propositions on how the differing degrees of integration in EU ¯nancial markets affect banking configuration and coordination strategies,and it tests them empirically. It links integration in financial market segments with business foci of banks, and assesses the propositions' validity directly at the level of a) thebanking value chain, b) corporate spheres, and c) corporate policy areas. The empiricalanalysis is based on an original, representative survey of foreign banking units. The resultsdemonstrate that a) the di®ering degrees of financial integration are visible in market participants' strategies, b) the efects of financial integration differ with business focus, andc) internationally-operating banks seem to have exploited the benefits offered by financialintegration if feasible.[...]