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ecb banking head urges more european mergers. europe's top banking supervisor urged governments to remove regulatory hurdles to enable more cross-national mergers. such mergers help stabilize the system and would make the companies better equipped to compete with u.s. rivals. the lack of a european system for the protection of deposits is the main reason why there are no major cross-national banking mergers in the eurozone to date. such a system for the currency region would help banks shift capital and liquidity across borders, said andrea enria, head of the ecb's european banking authority, in an interview with germany's «handelsblatt » on monday. making banks more stable. the deepening of integration in the european financial market would bolster the continent's banks in competing with u.s. giants, said enria. the mergers within national borders only served to cut costs, because this was where branch networks had an overlap. but in merging with companies in other markets, banks could better diversify their sources of income and risks and thus make them more stable. size matters. the european union will have to remove hurdles to enable the free movement of capital and progress in the integration of the eu's banking sector should be made a top priority, enria added. the italian is convinced that size is very much a question of perspective. a bank may very well be too big for one single country, but not at all for the european market, particularly in relation with top u.s. firms. economies of scale. the capital markets business is a good example for a segment that profits from economies of scale, said enria.
ECB Banking Head Urges More European Mergers
Europe's top banking supervisor urged governments to remove regulatory hurdles to enable more cross-national mergers. Such mergers help stabilize the system and would make the companies better equipped to compete with U.S. rivals.
The lack of a European system for the protection of deposits is the main reason why there are no major cross-national banking mergers in the eurozone to date.
Such a system for the currency region would help banks shift capital and liquidity across borders, said Andrea Enria, head of the ECB's European Banking Authority, in an interview with Germany's «Handelsblatt» on Monday.
Making Banks More Stable
The deepening of integration in the European financial market would bolster the continent's banks in competing with U.S. giants, said Enria. The mergers within national borders only served to cut costs, because this was where branch networks had an overlap.
But in merging with companies in other markets, banks could better diversify their sources of income and risks and thus make them more stable.
Size Matters
The European Union will have to remove hurdles to enable the free movement of capital and progress in the integration of the EU's banking sector should be made a top priority, Enria added.
The Italian is convinced that size is very much a question of perspective. A bank may very well be too big for one single country, but not at all for the European market, particularly in relation with top U.S. firms.
Economies of Scale
The capital markets business is a good example for a segment that profits from economies of scale, said Enria.