- Shares in Stellantis, Aston Martin skid on profit warnings
- Dali prints found in London garage sold at auction
- ECB chief backs bank mergers amid UniCredit, Commerzbank talk
- China stocks soar on stimulus, but US and Europe retreat
- 100 dead in storm Helene damage, flooding across US southeast
- China stocks soar on stimulus, Europe slides on automaker woes
- German antitrust watchdog steps up monitoring of Microsoft
- Nepal's urban poor count cost of 'nightmare' floods
- E.Guinea, Gabon clash at ICJ over oil-rich islands
- New blow for UK's Starmer as growth data disappoints
- China's top banks to tweak mortgage rates to boost housing market
- Muslim women break taboos navigating east London's waterways
- Nepal dam-building spree powers electric vehicle boom
- More than 60 dead from storm Helene as rescue, cleanup efforts grow
- Dozens missing, 9 dead in migrant boat wreck off Spanish Canaries
- Death toll from Hurricane John hits eight in Mexico
- Storm Helene's toll rises as rescue and cleanup efforts gain pace
- SpaceX launches mission to return stranded astronauts
- Storm Helene kills 44, threatens more 'catastrophic' flooding as cleanup begins
- SpaceX set to launch mission to return stranded astronauts
- Storm Helene kills 44, threatens more 'catastrophic' flooding
- Boeing strike grinds on as latest talks fail to reach agreement
- Iran 'news' sites, hackers target Trump ahead of US election
- US ports brace for potential dockworkers strike
- Japan's speedy, spotless Shinkansen bullet trains turn 60
- US hurricane deaths rise to 44, fears of more 'catastrophic' flooding
- Global stocks mostly rise, cheering Beijing stimulus
- Europe en route for Moon with new simulator, says astronaut Pesquet
- Fireworks forecast if comet survives risky Sun flypast
- Argentina judge orders dictionary to delete pejorative definition of 'Jewish'
- Global stocks rise on rate hopes, Beijing stimulus
- S.African woman turns 118, among the oldest in the world
- UK clears $4 bn AI partnership between Amazon, Anthropic
- Barca fans barred from Champions League away game over racist banner
- Chinese stocks extend surge, Europe higher on Beijing stimulus
- Pope says Church must 'seek forgiveness' for child sexual abuse
- China caps week of 'bazooka' stimulus for ailing economy with rate cut
- Cuts, cash, credit: China bids to jumpstart flagging economy
- France's debt weighs heavier ahead of budget debate
- Iran treads carefully, backing Hezbollah while avoiding war
- Return to sender: waste stranded at sea stirs toxic dispute
- 'Broken' news industry faces uncertain future
- On remote Greek island, migratory birds offer climate clues
- Taken from mother by nuns, victim seeks answers as pope visits Belgium
- China cuts amount banks hold in reserve to boost lending
- Hong Kong, Shanghai extend surge as China optimism boosts markets
- Vietnam president reiterates support for Cuba during official visit
- Drought reduces Amazon River in Colombia by as much as 90%: report
- Stay or go? Pacific Islanders face climate's grim choice
- Florida bracing for 'unsurvivable' Hurricane Helene
RBGPF | 7.18% | 64.75 | $ | |
RYCEF | -0.14% | 7.03 | $ | |
AZN | 0.16% | 77.745 | $ | |
CMSC | -0.17% | 24.7307 | $ | |
GSK | -0.04% | 40.695 | $ | |
SCS | 2.16% | 13.44 | $ | |
NGG | 0.02% | 69.747 | $ | |
RIO | -0.11% | 71.15 | $ | |
VOD | -0.69% | 10.021 | $ | |
BTI | -0.83% | 36.537 | $ | |
BP | 0.21% | 31.485 | $ | |
RELX | -0.61% | 47.27 | $ | |
BCC | -0.08% | 141.38 | $ | |
CMSD | -0.95% | 24.845 | $ | |
JRI | 0.88% | 13.7 | $ | |
BCE | -0.44% | 35.035 | $ |
ECB chief backs bank mergers amid UniCredit, Commerzbank talk
ECB chief Christine Lagarde said Monday that cross-border banking mergers in Europe were "desirable" to boost their competitiveness, despite mounting German opposition to a potential tie-up between Commerzbank and Italy's UniCredit.
"Cross-border mergers (between) banks that can actually compete at the scale, at the depth and at the range with other institutions around the world, including the American banks or the Chinese banks, is in my view desirable," the European Central Bank president told the European Parliament.
UniCredit has taken Germany by surprise by building a position in Commerzbank equivalent to about 21 percent since the start of September, fuelling speculation of a potential takeover.
German unions and politicians have voiced fears that an acquisition of the country's second-largest lender could lead to job losses and curtail lending to Germany's small and midsize businesses.
But European policymakers have for years been pushing for deeper integration of eurozone financial markets, including through banking sector consolidation, saying it is necessary to create financial institutions capable of competing internationally.
At a hearing of the European Parliament's committee on economic and monetary affairs, Lagarde refused to comment on specific cases when asked about a potential merger between the Italian and German banks.
But she made her general views clear: "If banks are relatively small, if their profitability is relatively low, if their scope and scale is significantly smaller, they stand at a competitive disadvantage."
She did however acknowledge that mergers also bring "risks that need to be considered", while offering reassurances that the ECB would "do its job" by carefully reviewing any proposal.
- 'Unconvincing' arguments against tie-up -
In the eurozone, the ECB's Single Supervisory Mechanism will have to check that UniCredit has complied with banking rules in its rapid acquisition of its stake in Commerzbank.
Italy's second-biggest bank is also seeking ECB permission to raise its stake to 29.9 percent, just short of the 30 percent threshold that would require it to make a public offer for the entire bank.
Chancellor Olaf Scholz has come out against a takeover, warning the Italian lender against "unfriendly" acts.
Before Lagarde made her remarks, an economist who chairs a panel advising Scholz's government said the arguments against a potential tie-up were "unconvincing".
"In principle, there is no objection to a German bank being acquired by a foreign bank," Monika Schnitzer told AFP by email.
"The objections raised by some regarding job losses and reduced financing for German SMEs are unconvincing," she added.
"An increase in productivity is necessary to become more competitive internationally. And a foreign bank would also want to do business, which includes granting loans," Schnitzer said.
Commerzbank has vowed to fight any takeover attempt and the German government has pledged support for the bank's strategy to remain independent.
The Frankfurt-based lender last week raised its profit forecasts and announced plans to better reward shareholders, hoping to boost its share price and make a takeover more expensive.
The German government for its part still holds a 12 percent stake in Commerzbank, after selling a 4.5 percent bloc of shares earlier this month that was snapped up by UniCredit.
Berlin has since said it will not sell any more shares for the time being.
Y.Uduike--CPN