The incoming Internal Market Commissioner, Mr Charlie McCreevy may oversee European Commission plans to redefine the powers of national supervisors to block cross-border banking mergers in order to help stimulate international deals, European Union officials said today.
The issue of how to spur more cross-border merger activity in the European Union and match activity in the United States was on the table of finance ministers and central bankers at a high-level meeting in the Dutch seaside resort of Scheveningen.
Despite a proposed takeover by Spain's Santander Britain's Abbey National, large banks and the Dutch EU presidency have said interference by national supervisors is a key deterrent to trans-national banking mergers in the EU.
EU banking rules give national supervisors the power to block mergers if they feel financial stability is at stake.
"We are trying to ensure less scope for prudential rules to be invoked for political reasons," Commission spokesman Mr Jonathan Todd said. "We have a look at how best to require supervisors to be specific when they invoke such rules."
He said the Commission planned to rewrite the so-called banking directive, which defines how banks can operate across the bloc, but also sets out rules on prudential supervision.
An EU official said outgoing Internal Market Commissioner Mr Frits Bolkestein was in favour of redefining the power of national regulators. But the issue will depend on whether his successor, Mr McCreevy, will want to carry on the project.
As a first step the Commission will carry out an overall assessment on existing hurdles to bank mergers, focussing on the role of national supervisors.
"We concluded that the European Commission should do a study on obstacles to bank mergers, including the way in which supervisors handle cross-border mergers," Dutch Finance Ministers Mr Gerrit Zalm, who chaired the meeting.
Top officials from ABN AMRO, Paribas and the Royal Bank of Scotland briefed ministers and gave a a presentation on the prospects for cross-border bank mergers.
The report shows that over the last 10 years cross-border European banking deals accounted for only 2 percent of the total volume of mergers in the sector against an average of 37 percent for the other industrial sectors.
Asked what was the biggest obstacle to banking mergers in the 25-nation bloc, ABN AMRO's chief executive Rijkman Groenink told reporters: "Political."
"A number of central bankers said today that in itself supervisory rules are not an obstacle, but of course supervision can be used for politics," he said after meeting the ministers.
One example of national interference is an attempt in 1999 by the Portuguese authorities to try to veto the acquisition of Champalimaud group by BSCH of Spain.