A frenzy of Bank M&A? Be careful what you wish for

FOR years, European banks, their regulators and stakeholders have hailed consolidation as the way to boost efficiency and profitability. Germany’s attempt to create a domestic behemoth will force others to review their options.

Unfortunately, though, the deal is unlikely prompt the wave of the tie-ups that are really needed: cross-border deals. For that to happen, Europe needs a different set of rules. The risk is that the German tie-up triggers other defensive mergers among domestic rivals that push policy reform onto the back-burner.