Recent events in Italy's banking industry - an alliance of two big banks, a sell-off of another and hints that staff cuts are in the wind - may appear revolutionary in a country where, traditionally, shareholder value has not been a prime consideration. But analysts argue that much greater rationalization is needed if the banks are to compete effectively in Europe.
The first ripple came in May when Banco Ambrosiano Veneto (Ambroveneto) and Cassa di Risparmio delle Provincie Lombarde (Cariplo) - Italy's largest savings bank - agreed a strategic alliance to establish the country's second largest banking group. At end-1996, the banks had combined assets of just over L250 billion ($148 billion). Moody's and other analysts responded positively to this symbolic message; the US ratings agency noted the alliance had "the potential for significant commercial and cost benefits in the longer term [and] represents an important step in the ongoing consolidation taking...
