Brussels, 18/02/2005 (Agence Europe) - On 17 February, Charlie McCreevy received a written response from Antonio Fazio, the Governor of the Italian Central Bank. This letter aims to allay the fears of the European Commissioner for the Internal Market about the ability of a foreign investor to take control of an Italian bank (see EUROPE of 15 February, p.9). An answer from Brussels to the governor's letter is expected within a fortnight. In line with its role as guardian of the treaties, the Commission wishes to stress that there is no discrimination on the basis of nationality in the Italian and European banking sectors, and that a national authority cannot block a foreign takeover of a national bank by citing the acquirer's nationality as a prudential criterion. The Commission is currently carrying out a study into the regulatory obstacles to cross-border bank mergers, especially on the prudential measures allowed by European legislation. It is set to present the results at the informal Ecofin Council of 13 and 14 May.
In his letter, which was published by Corriere della Sera of 18 February, Antonio Fazio assures the Commission that “on acquisitions and stockholdings in Italian banks by foreign bodies, there are no differentiations made on the basis of category, status or quality of applicants”. He added: “The Bank of Italy examines applications for equity participations which are formally submitted to it in application of the Italian legislation and that of the European Union”, and respects its mandate, which is to “guarantee prudent and healthy credit management”. The Governor of the Italian Central Bank is convinced that “the exercise of legitimate powers (…) has not led, nor can it lead, to the creation of the inappropriate or illegal barriers to which the [Commission's] letter refers”. He adds that “cooperation with foreign banks has been considerable”. “In many cases, foreign banks have control of Italian banks”, he stressed, but gave no actual examples of this.
In an interview with Corriere della sera, Charlie McCreevy said that “the case is not closed” and that he would be examining Antonio Fazio's written response in great detail, together with his services, and that he would respond “probably within a fortnight”. Mr McCreevy acknowledges that he has held “a series of informal contacts” with European banks which have complained at the actions of Italian banks, without referring to any by name. The Corriere della Sera quoted the Spanish bank Banco Bilbao Vizcaya and the Dutch bank Abn Amro.
Charlie McCreevy says that the problem is not solely Italian: “I will continue to follow developments in the banking sector on the ground, in Italy and the other European countries”. He pointed out that in the European banking sector, discrimination on the basis of nationality breaches the treaty: “The national competent authorities can evaluate and assess mergers or capital operations, taking account of the prudential criteria. But the buyer's nationality cannot be one of these criteria”.
At the Ecofin Council of September 2004, the Economy and Finance Ministers of the EU called on the Commission to carry out a study into the regulatory obstacles to cross-border banking mergers (see EUROPE of 14 September 2004). This study concentrates on prudential rules, which are mostly political, which the national control authorities can invoke to prevent a foreign bank from absorbing a national one. The Commission is carrying out a detailed examination of the application of article 16 of the directive 2000/12/EC on access to the activities of credit institutions. This article stipulates that “in the case of influence brought to bear by [a credit institution established in another Member State] could harm the prudent and healthy management of the institution, the competent authorities may take appropriate measures to put an end to this situation”. These measures include injunctions, sanctions to be imposed on managers or the suspension of voting rights.
According to Community sources, the informal Ecofin Council of 13 and 14 May will be informed of the results of the study underway and will be able to include the subject on the agenda for the September meeting. The prospects of a legislative proposal to modify article 16 of directive 2000/12/EC have not been ruled out.