The European Central Bank is launching a consultation aimed at harmonizing national rules to simplify cross-border mergers and acquisitions. The consultation, open since June 29, will run until the end of August.
Harmonization of national rules
The European Central Bank wants to amend or update a set of "national options and discretions", 56 in all, which currently allow member states to set aside European rules in favor of national ones.
It is often because of this lack of harmonization between countries that banks refrain from cross-border mergers, preferring to merge within the same country.
The more the rules are harmonized across Europe, the greater the transparency for banks with M&A projects. To make their task easier and to be in a better position to anticipate their expectations, the ECB wants to sort through all these possible options, even more numerous since the CRR2 and CRD5 directives of 2016.
NSFR ratio: towards a single calculation method
The issue of bank liquidity, and the so-called NSFR (Net Stable Financial Ratio), will be closely examined during this consultation.
The NSFR ratio is linked to banks' obligation to have sufficient liquidity to cover a year's operations from their own resources, to avoid the risk of bankruptcy.
At present, through the national options and discretions that the ECB is preparing to update or amend, not all EU member countries apply the same method of calculating this ratio, which penalizes banks in the event of cross-border mergers.
Mergers and acquisitions are therefore mainly carried out on a national scale, as is the case in Italy with Intesa and Ubi Banca, or in Spain with Caixa and Bankia.