Abstract
It is worth looking at the last decennia in the banking sector to reflect on the relation between size and efficiency: are there efficiency gains and economies of scale in banking, and is there an optimal size, one that allows the best productivity ? It is a delicate, but very important question for the soundness and regulation of the banking sector, and its capacity to serve the economy, with a degree of competition sufficient to transmit productivity gains to end-users.Measures of efficiency and optimal size in banking are always difficult to approach. Investment Banking is one segment of banking activities where size seems to bring superior profitability, in most years; this seems however to come not so much from superior efficiency but from the capacity of large Investment Banks to control some key segments of the capital markets to their advantage, and to the detriment of markets, taxpayers, shareholders.
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