This case deals with the development of a pan-European universal banking strategy by a major state-controlled financial institution. First, can Crédit Lyonnais (CL) make a multi-market retail and corporate banking strategy work in Europe, where it faces entrenched competition and vastly different banking markets in the various EU countries? What will determine CL's success or failure in this regard? Second, is CL's version for universal banking, including major shareholdings in non-financial firms, an asset or a liability in realising its objectives? This raises the issue of continental European versus Anglo-American approaches to corporate control and the relationships between banks and industry. Third, how does the role of the state influence strategic positioning and execution on the part of CL, which raises the issue of the appropriate relationship between banks and the state, its impact on private-sector competitors, and the use of banks as an instrument of government policy. The case is set at the end of 1992, a critical decision point for CL and its chief executive.
