French cbank calls for more cross-border mergers

The Banque de France wants it to be easier for European banks to merge, the central bank’s chief Francois Villeroy de Galhau said on Wednesday.

“We have to stop putting the brakes on the cross-border consolidation among eurozone banks,” Villeroy de Galhau told a banking supervisory conference.

“Healthy and solid cross-border consolidation enables banks to better diversify their risks in the whole of the euro area and to target more efficiently savings to productive investment,” he said.

“A cross-border merger need not be more difficult or complicated than a domestic merger,” he continued, calling for existing hurdles to such tieups to be lifted.

He proposed that the European Banking Authority, which will relocate from London to Paris once Britain has left the EU, undertake a comprehensive survey of all of the current barriers to cross-border activities and mergers.

“We’re still considerably lagging behind the US market,” where the five biggest banks command a market share of more than 40 percent, compared with less than 20 percent for the eurozone’s top five, Villeroy de Galhau said.

In recent months, banking tie-ups have tended to be domestic and involved ailing lenders, such as the takeover of Banco Popular by Santander in Spain. (AFP)