PARIS (Reuters) - Europe needs strong investment banks to provide financing to the economy, France's central bank governor said on Tuesday as some of the region's biggest banks face growing pressure.
Thousands of job cuts at Germany's once mighty Deutsche Bank <DBKGn.DE> have offered a stark reminder of the shaky footing that some of Europe's biggest investment banks are standing.
European investment banks have in recent years been losing market share in their own markets to big U.S. investment banks, which bankers say is because regulation has kept the Europeans from consolidating as their American rivals did years ago.
"Keeping a European capacity in investment banking is a strategic imperative," Bank of France Governor Francois de Galhau told a financial sector conference in Paris.
"European banking consolidation is overdue and is indispensable, not to reduce competition - quite the opposite - but to reach the critical mass necessary to make digital investments and allow savings to circulate," he added.
Many ECB policymakers like Villeroy and bankers have long called for regulation to be adapted to encourage cross-border mergers, but the governments in Germany and the Netherlands are opposed, bankers say.
(Reporting by Leigh Thomas; Editing by Bate Felix)
