The EBF fully supports the intention of the ECB to achieve clarification and transparency on its supervisory approach to notifications of proposed acquisitions and applications for permission for a business combination.
As the
ECB rightfully indicates,
decisions for consolidation belong to market participants. Nevertheless,
the ensuing supervisory examination is a crucial step in the success of
such transactions. The publication of an
ECB guide should add clarity
to the process. However, it will be important for the
ECB to not just
clarify the process, but we strongly encourage the
ECB to actively
facilitate mergers.
In addition, we would like to emphasize the following key points of the EBF response:
- The EBF supports the ECB in coordinating with other authorities
during the process of a banking merger. As an example, the EBF
encourages to coordinate with the Single Resolution Board to establish
transitional arrangements of the minimum requirement for own funds and
eligible liabilities (MREL) and total loss-absorbing capacity (TLAC),
which take into account the merits of consolidation for the combined
entity.
- The challenges that are currently being faced by banks are more
structural and need to be addressed through changes in regulation. We
need to reduce regulatory barriers, which will requires a broader
approach to the topic, which will need action from lawmakers. Those
include, but are not limited to:
- more harmonization in anti-money laundering (AML) and tax regimes is needed
- addressing problems arising from regulation that goes beyond global standards, such as the regulatory treatment of external MREL
- Removal of obstacles to the free flow of capital and liquidity
Full response
© EBF
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