Abstract
According to a part of economic literature, the growing competition among financial intermediaries, together with the consequent interest margin shrink, induced many banks to enter new markets and adopt cross-selling strategies. Our results show that two kinds of banks coexist in Europe: cross-selling banks, more interested in ‘depositors’ than in loans, and traditional banks, interested in granting loans to good borrowers. The awareness of the deep difference existing between these two types of banks now operating in Europe is very important for the implementation of an effective economic policy in the face of the financial crisis. We find evidence that cross-selling banks tend to be localized in countries where the banking system is less concentrated but they are not characterized by lower interest margins.
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