This paper - written, as a commission, for EURO-FIET (the pan-European labour federation) - confronts two of the trickiest issues with which the retail financial industry has to deal today:

· What kind of a challenge to the traditional franchise of the European retail bank is posed by the much-vaunted irruption of new banks and non-banks into the sector? and
· What are the implications (short and longer-term) for employment in the financial sector?

The short answer to both questions is that new players do pose a serious threat - indeed, a threat that is much greater than the limited inroads they have actually made so far - and that the potential employment impact is significant and negative.