Mergers and acquisitions in financial services are bad news for employees, shareholders and, in the long run, customers, an influential report claims this week.
The study, The Impact of Mergers and Acquisitions in the Banking and Insurance Sector, was carried out by Uni-Europa, the European centre for finance sector trade unions.
Roger Lyons, the general secretary of white collar union MSF, said: “The finance industry is in the grip of a great take-over swindle. Given the evidence of the disastrous effect of mergers and take-overs in the finance sector, we can only conclude that they are driven by boardroom greed.”
The report claims that as many as 130,000 jobs have been lost because of consolidation. It also says that the main beneficiaries have been senior individuals within companies such as board directors.
But it adds that customers are un-likely to be winners in the long term.
“Increasing merger activity is serving to restrict competition and will therefore, in the long run, be a disadvantage to consumers,” the report says.
“In fact, it is argued that restriction of competition is very often the ‘raison d'etre' of merger activity, as it services to counteract competitive pressure.”
The MSF union also used the report to condemn mergers and takeovers as having a “detrimental effect” on employees' pay and conditions.
Lyons said: “We need European-wide regulation to prevent mergers and takeovers where there is no clear case of consumer, employee and shareholder benefit.”