These statements by the President of the ECB echo the possible takeover of the German bank Commerzbank by the Italian UniCredit.
The President of the European Central Bank, Christine Lagarde, ruled on Monday that cross-border mergers between EU banks were “desirable” to strengthen their competitiveness, while the Italian UniCredit could buy the German Commerzbank. “Cross-border mergers of banks that can compete on size, depth and range with other institutions around the world, including US and Chinese banks, are, in my view, desirable”declared Christine Lagarde during a hearing at the European Parliament.
The central banker was responding to a question about the ECB’s role in facilitating cross-border mergers in the EU and possible interference by national authorities in such operations. Christine Lagarde has not taken a position on the particular case which is shaking up the banking sector: the rise of UniCredit since mid-September in the capital of Commerzbank, soon to 21%, while the Italian group does not hide its intention to move towards a buyout offer. “It must be kept in mind that not all mergers are positive and that there are responsibilities and risks to consider in this process, which is the responsibility of the stakeholders”added Christine Lagarde.
Possible increase of UniCredit to 29.99% of the capital of Commerzbank
In the eurozone, the ECB’s Single Supervisory Mechanism (SSM) will have to check whether UniCredit complied with the rules by quickly taking a large stake in Commerzbank. The Italian has formally asked the ECB to approve a possible increase to 29.99% of the capital, just below the threshold for triggering a purchase offer in Germany.
The German state, hostile from the start to this possible passage of Commerzbank under the Italian flag, however, does not have the direct means to block Unicredit’s ambitions. “It is up to the ECB and the European Commission to examine systemic risk” assumed in the event of a merger of the two major banks, and “up to the European Commission to examine the effects on competition”declared Monday the president of the group of economic experts advising the German government, Monika Schnitzer, to AFP. Unicredit’s approach could give rise to new European champions in the banking sector, experts point out.
