An examination of strategic
alliances and the origins of
international banking in Europe
Birmingham Business School, University of Birmingham,
Birmingham, UK, and
Loughborough Business School, Loughborough University, Loughborough, UK
Purpose – The purpose of the paper is to explain how and why strategic alliances, in the form of
clubs and consortiums, played an important role in the internationalisation of banks.
Design/methodology/approach – A longitudinal analysis, commencing in 1964 with the
emergence of the Eurocurrency market and culminating with the creation of the European single
market in the early 1990s, is used to provide an insight into the creation of clubs and consortium
banks. The authors adopt the Lawson realist methodology and identify broad structural changes in
the markets in which banks operate, i.e. “mechanisms” and relate these to major trends, i.e. “events”
such as the creation of strategic alliances.
Findings – It is generally recognised that banks became international in response to the globalisation
strategies of their multinational customers. However, the paper reveals that banks were also
internationalising in response to structural changes in the ﬁnancial services markets.
Research limitations/implications – A criticism of the Lawson methodology is that it is not
always possible to discern causal linkages between mechanisms and events. This explains why
research of this kind is typically retrospective because it is only with the beneﬁt of hindsight that the
causal linkages can be fully understood.
Originality/value – The study provides new insights into the emergence of international banking
and the role of clubs and consortiums in this process.
Keywords Banking consortia, Strategic alliances, Banking, International cooperation
Paper type Research paper
For almost 40 years the ﬁnancial services industry has been experiencing
unprecedented change. One manifestation of this change has been the
internationalisation of banks, which inter alia has been caused by the deregulation
of ﬁnancial markets, the introduction of new technology, changing patterns of
competitive behaviour and the globalisation of large corporate businesses (Llewellyn,
1996; Nellis, 1998; Jayawardenha and Foley, 2000). Against this background of radical
change the authors examine the importance of co-operation between banks and the role
that strategic alliances have played in the origins of modern day international banking.
The authors argue that modern day international banking started in the mid-1960s
with the emergence of the Eurocurrency markets and the creation of strategic alliances
by groups of banks from different countries. Accordingly, they present a longitudinal
The current issue and full text archive of this journal is available at
Received 26 May 2005
Revised 30 September 2005
Accepted 29 May 2006
International Journal of Service
Vol. 18 No. 2, 2007
q Emerald Group Publishing Limited