Britain’s banks should take part in Macron’s grand restructuring of European finance

Combining the expertise and the networks of the two banks might well create a genuine global competitor to the American and Chinese giants.

Any of those deals would present formidable challenges. And yet, 15 years on from the financial crisis, all of the UK banks are in much better financial shape than they have been for a generation or more.

Right now, the British market is stagnant, and offers few opportunities by itself. If they don’t expand into new markets, it will be hard to keep growing; even worse, a mega-bank formed on the Continent will eventually turn its eyes towards the UK.

Of course, bank mergers have a bad reputation in Europe. The collapse of Royal Bank of Scotland in the financial crisis of 2008 and 2009 after a string of over-ambitious acquisitions has remained in the memory as a warning against trying to take control of a rival.

That said, the success of UBS’s merger with Credit Suisse, even if it only happened when the Swiss government put a gun to the heads of both sides, has shown that it is possible to make it work.

Shares in UBS have risen by 58pc over the last 12 months as the combination of the two has proven surprisingly successful.

Meanwhile the growing power of JP Morgan has demonstrated that scale still works, and hoovering up rivals such as Silicon Valley Bank during the mini-crisis of last year has shown that it can still extend its dominance of the American market. Get it right, and merging banks can still be a very easy way for everyone to make money.

Sure, Macron is certainly thinking of all EU combinations. And no doubt he is hoping for a French-led European champion to emerge, led by a French banker, and with its headquarters in Paris.

If he was left in control, SocGen would take over Santander, while BNP Paribas would take over Deutsche Bank, and perhaps one of the Spanish or Italian banks as well.

A British bid for any of the major players on the Continent might well be vetoed on the grounds that a merger could only be allowed between banks that are already located within the eurozone. We will see in due course.

One point is certain, however. Macron may have deliberately started the process, but he will find it hard to control what happens next, or to remain completely in the driving seat.

If governments are encouraging a wave of consolidation, the major UK banks should be ready to take part – or risk getting left behind.