In one way or other, European governments are all trying to stabilise and consolidate their beleaguered banking industries. Paris is prodding some mutual banks to consider combining, and President Nicolas Sarkozy continues to have hopes of seeing a merger between BNP Paribas and Société Générale to create a new French banking champion. In Italy, there is talk of merging UniCredit with Mediobanca and ultimately combining the two with Generali to form a domestic financial colossus.

But it is perhaps in Germany where the federal government has been the most active in promoting consolidation in both the commercial banking industry as well as in the state banking sector, albeit in a more subtle behind-the-scenes manner.