The head of Germany's central bank hopes that bank mergers will create stronger, more competitive financial institutions.
“We need strong, robust banks to enable businesses to tackle and finance the challenges of the future.” German Bundesbank chief Joachim Nagel He said during his speech Commerzbank Events in Frankfurt Wednesday (September 18th).
“In the event of a potential merger, it is important that a competition authority is established that fulfils this task as well as possible,” Nagel added. Reported According to Reuters.
As the report states, the speech UniCredit teeth Considering acquisition of Commerzbank, Movement The move caught regulators off guard and drew an unfriendly response from the bank's local management.
Nagel did not name either bank, Reuters Added, But he noted that any comments from the central bank would likely attract attention because the Bundesbank sits on the European Central Bank's supervisory committee and the ECB would need to approve the merger.
Based in Italy, UniCredit is a European Uppercase is best Banks, reports Added, And they likely have the financial wherewithal to pull off the merger, but the deal would be politically sensitive as Germany's banking industry is dominated by two giants, Deutsche Bank and Commerzbank, Reuters reported.
Earlier this year, ECB Governing Council members Francois Villeroy de Galhau As he told Reuters Bank mergers Trading between different European countries should not be as difficult as trading between banks in the same European country. country.
“That is desirable and logical. and “Cross-border mergers within a monetary union will usually be as simple and easy as mergers (within the same country),” Villeroy said.
His comments were One from French President Emmanuel Macron has argued that European banking integration is necessary to increase the European Union's economic power on the world stage.
In related news, the U.S. Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation (FDIC) announced this week that it will adopt new rules that, among other things, will change how it reviews merger proposals. So then risk.
As PYMNTS noted, the FDIC document specifically states: Industry Consolidation, With distributors “We recognize that mergers in rural areas involving local community banks have the potential to lead to market concentration,” it said.
The FDIC stressed that it would carefully weigh the competitive impact of such a merger against “the public benefit provided by the resulting institution's ability to serve the convenience and needs of its local community.”
