European Banking Clubs

European Banking Clubs n the 1960s: A Flawe d Strategy Duncan M. Ross* Centre br Business istory nScotk•nd and Dq)artment f Economic nd Social istory University f Glasgom European anking lu bs n the 1960s and 1970s began s a movement imbued with the idealism nd promise f European ntegration. he strategic choices which they represented, owever, were ultimately oomed o failure. This s so for a number of reasons; hey were essentially efensive esponses o new competition n traditional s well as new markets, heyrepresented n attempt o rely on cooperation ather han competition n a sophisticated nd highly differentiated arketplace, ndtheir constituent nstitutions ventually realised he potential or individual rofit which nternational anking ep- resented. recent erdict on the vast gulf between hehopes which attended their formation in one institution and the e ventual outcome is that, "there are few examples f such misjudgement" Gall, Feldman, ames, Holtfrerich and Buschgert, 995, p. 752]. This paper will consider o me of the reasons or the founding f the banking lubs, nd consider heir place n t he rapidly hanging intemafional financial environment of the late 1960s. It will assess the background o, and easons or, British anks' nvolvement n these nstitutions. Using previously navailable rchival aterial, t will be possible o explore he relationship etween he Midland Bank and he first of the clubs, he European Advisory Committee. t will be su ggested hat t he decision o create he relationship as an understandable esponse o the market conditions hich existed at the time, but t hat the demise was nevitable. EuropeanBankingStrategies n the 1960s European banks adopted two, related, strategies or developing international usiness n the 1960s; irst, hey ormed roups r clubs f large commercial anks which were designed o extend heservices f their members * I am grateful o Midland Bank or allowing ccess o the records ited herein, andto Edwin Green or assistance n locating nd using hem. Earlier versions f this paper ave benefited rom discussions ith Brian A'Hearn and Neil Rollings nd from comments t l'Universite 'Artois Arras, Department f Economic nd Social History, University f Glasgow, nd he Department f Economics, niversity f Dundee. BUSINESS AND ECONOMIC HISTORY, Volume wenty-seven, o. 2, Winter 998. Copyright 1998 by the Business istory Conference. SSN 0894-6825. 353

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European Banking Clubs