Joaquin Almunia, EU Competition Commissioner
A European Union (EU) watchdog has claimed there are too many banks currently operating in Europe.
Speaking to the Financial Times, Joaquin Almunia - the EU competition commissioner - said more consolidation is required because a fragmented market is having an adverse effect on the system.
The industry figure pointed to the lack of an integrated payment system as one factor that needs to be addressed, as it is making it increasingly difficult for the sector to match up to lenders in countries such as the US or China.
He commented: "From my perspective as the competition commissioner, I would not have any problem with observing a process of reducing the number of players at the EU level."
National markets continue to dominate retail banking in Europe, causing a "real problem", Mr Almunia added.
His comments come after recent statistics from Banker magazine showed that banks in China and Japan have overtaken those in the UK in terms of profitability over the last few years.
By Asim Shah