McCreevy proposes new rules for bank mergers

NEW rules aimed at preventing political interference in bank mergers and takeovers in the EU have been proposed by Internal Market Commissioner Charlie McCreevy.

They follow efforts in a number of countries, specifically Italy and Poland, to block takeovers of financial institutions.

If the amendments to the current directive are agreed by member states and the European Parliament they will reduce the scope for national regulators to delay or prevent such moves.

The new rules reduce and define more closely the grounds on which a national regulator can block a foreign bank or insurance company taking over or merging with a domestic institution.

Mr McCreevy said the existing rules allow regulators to use very subjective criteria, such as the suitability of the acquirer without defining what this means.

The only criteria regulators could apply in future under his list are: the reputation of the proposed acquirer; reputation and experience of any person that may run the resulting institution or firm; financial soundness of the proposed acquirer and compliance with relevant EU directives.

He also proposes amending the current directive by introducing specific deadlines and formal communications and reducing the assessment period from three months to 30 working days.

“This has to be the way forward if we’re really serious about improving growth in Europe and enabling our financial companies to compete globally. Markets are dynamic and we have to provide the appropriate framework to avoid any obstacles to their dynamism,” he said.