The European Commission is reported to be reviewing the EU Banking Directive with a view to facilitating cross border banking mergers.
Currently, Article 16 of the directive states that individuals or firms seeking to acquire a majority stake in a bank must first inform that country's government. The national authorities then have three months to express opposition to the merger if "in view of the need to ensure sound and prudent management of the credit institution, they are not satisfied as to the suitability of the person".
According to reports in the European media, the Commission is expected to remove or redraft the Article in order to ensure that the supervisory bodies of EU member states must offer transparent and specific reasons if they intend to oppose a merger.
This is designed to ensure that cross-border mergers are not opposed by national governments on purely political grounds.
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