banks and encouraging a wave of M&A. However, this would need to be considered against
the role that smaller, local-oriented banks play in regional economic development.
Given that technological change (innovation) is the main driver of productivity growth
in the EU co-operative banking industry, an appropriate policy recommendation is for larger,
or centralized co-operative banks to develop and franchise technology to smaller, co-
operatives. Indeed, the group structure, which is a feature of co-operative and savings banks
sectors in Europe, is ideally suited for this strategy. However, the general conclusion is that
there is room for improvement in the management of European banks.
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