The European Central Bank’s (ECB) chief supervisor Andrea Enria pledged on Thursday, January 30, to remove some hurdles to cross-border bank mergers in the euro-zone, such as restrictions on moving cash between subsidiaries in different countries, reported Reuters.
The ECB has long been calling for consolidation in a sector struggling to make money due to low interest rates and high costs from its bricks-and-mortar network of branches.
But mergers between banks in different countries have been few and far between, partly due to the patchwork of national requirements on liquidity and capital, and to the lack of a common deposit protection scheme.
“ECB Banking Supervision is considering a range of options, such as enhancing the possible role of group support agreements for subsidiaries in (a) banking group’s recovery plans,” Enria told bank representatives in Frankfurt.
“We are also open to facilitating the granting of cross-border liquidity waivers at the solo level to the extent possible within the current legislative framework.”
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