ECOFIN Ministers back new rules on cross-border banking deals

ECOFIN Ministers back new rules on cross-border banking deals - source UPDATE

	Published : Tue, 27 Mar 2007 11:46 By : Agencies Print this Story

(Updates with further background)

BRUSSELS (AFX) - EU finance ministers have backed European Commission proposals for reforms to the EU directive on cross-border mergers and acquisitions between banks, which will make it more difficult for national regulators to block such deals, a source said.

The proposed new directive amends existing rules on the role of national regulators in the sectors and clarifies the criteria against which supervisors should assess possible acquisitions.

Current EU rules allow national regulators to block proposed mergers if they consider that the 'sound and prudent management' of the bank may be jeopardised.

Under the new rules, supervisory authorities now have 60 working days to clear any acquisition and 'sound and prudent management' is limited to five criteria.

It also forbids member states from 'gold-plating' the proposals, i.e. they may not impose more stringent requirements than those set out in the directive.

Speaking last year, EU internal markets commissioner Charlie McCreevy said 'These new rules mean that supervisory authorities will have to be clear, transparent and consistent when assessing cross-border mergers and acquisitions. They leave no room for political interference or protectionism'.

The measures are seen as a response to events in 2005, when the EU took legal action against Italy over the involvement of its central bank in the takeover battle for Banca Antonveneta SpA.

Earlier this month, the European Parliament approved a first reading of the directive.

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ECOFIN Ministers back new rules on cross-border banking deals - source UPDATE