; and many have begun to address their efficiency and profitability problems. but clearly, they are not yet up for a marathon with a good finishing time. there remains a lot to be done. reorienting business models and optimising organisational efficiency will be one part of the fitness regime. another will be structural reorganisation in the sector. mergers & acquisitions will continue to play an important role here, too. but only the link - up of healthy players is likely to lead to stronger teams – although, even this cannot be taken for granted. putting weak athletes together will certainly not lead to high performance. i now look forward to a fruitful discussion. thank you very much for your attention. 1 t phillippon ( 2015 ) : has the us finance industry become less efficient? on the theory and measurement of financial intermediation. american economic review 105 ( 4 ) : 1408 – 1438. 2 ar dombret ( 2016 ) : gibt es zu viele banken? der sektor nach der finanzkrise. vortrag bei der generalversammlung der osterreichischen bankwissenschaftlichen gesellschaft in wien. 3 e. g. a behr & f heid ( 2011 ) : the success of bank mergers revisited. an assessment based on a matching strategy. journal of empirical finance 18 : 117 – 135. 5 / 5 bis central bankers'speeches

andreas dombret : under pressure – is consolidation the solution for europe's banking sector? speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the conference " doing m & a deals around the world ", frankfurt am main, 13 october 2016. * * * 1 introduction ladies and gentlemen about a week ago, the nobel prize in medicine was awarded for work that is of indirect interest to the banking industry. japan ’ s yoshinori oshumi was honoured for exploring how human cells not only break down but also recycle cell trash that results, for example, from fighting diseases. oshumi found that when this process, called autophagy, is disturbed, for example through ageing, this has serious repercussions on our health. i think it is fair to say that this sort of mechanism was truly needed after the financial crisis revealed the damaging cell material within banks. eight years later, the question is whether the organisms of banks were capable of, and successful in, disposing of or recycling financial waste. today, i will examine this question from a european angle. and i will also ask whether mergers & acquisitions may well be one of the healing mechanisms of the european banking system. 2 in bad shape? the status quo of europe ’ s banks in the last few months, concerns about european banks spun out of control. while there was no panic, sometimes the media discussion made us almost feel as if there was. now, let ’ s take a sober and realistic look at the facts. over the course of this year, european banking stocks had to weather strong headwinds. while the overall european stock market, as represented by the euro stoxx 50 index, remained more or less unchanged, the euro stoxx banks index dropped by more than 30 %. at the same time, volatility of the bank stocks remains high, although that seems to be heavily related to post - brexit jitters. such market movements suggest some sort of doomsday scenario. is that justified? clearly not. current concerns about the european banking sector are overstated. yes, the sector is not yet ready to be successful in the new post - crisis environment. and market sentiment reflects just that. but – and that ’ s where exaggeration comes in – the sharp movements do not take into consideration that the solvency of the sector in europe is not in doubt. in other words, while