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Research Department Increasing concentration in European banking: a macro-level analysis D. Jansen and J. de Haan Research Memorandum WO no. 743 September 2003 De Nederlandsche Bank INCREASING CONCENTRATION IN EUROPEAN BANKING: a macro-level analysis D. Jansen and J. de Haan * * Views expressed are those of the individual authors and do not necessarily reflect official positions of De Nederlandsche Bank. Jakob de Haan worked on this paper while he was visiting scholar at De Nederlandsche Bank. The authors would like to thank Linda Toolsema, Peter van Els, Maarten van Rooij and an anonymous referee for valuable comments. Any remaining errors are of course our own responsibility. De Nederlandsche Bank NV Research Department Research Memorandum WO no. 743/0323 P.O. Box 98 1000 AB AMSTERDAM September 2003 The Netherlands ABSTRACT Increasing concentration in European banking: a macro-level analysis D. Jansen and J. de Haan The recent wave of mergers and acquisitions in the European banking sector has raised concerns that bank profitability will rise because of less competitive market conditions. This paper analyses the relationship between concentration, competitiveness, efficiency and profitability in the European banking markets by using panel regressions. Estimates from various recent studies on competition and efficiency in national banking sectors are related to concentration and profitability indicators for these sectors. Our results do not suggest the existence of any connection at th