European bank supervisor says Italian merger 'must' succeed
Europe's banking supervisor said on Tuesday that she would work hard to ensure a proposed tie-up between Italian banks Banco Popolare and Banca popolare di Milano (BPM) was a success.
"We are working very hard with the Italian colleagues to make sure that we put the adequate requirements, no more than is needed but not less either," said Daniele Nouy, president of the Supervisory Council at the European Central Bank.
The merger "has to be a success and the bank has to be strong at the very beginning, this will be the third Italian bank. It has to be in a situation comparable to its peers in Italy," Nouy told the European Parliamet's committee for economic and monetary affairs at a regular hearing in Brussels.
The proposed tie-up was "a very important operation, it has to be a success, precisely because it's maybe the first of a series of other ones," Nouy continued.
In other countries, a number of similar banking mergers had "ended up creating a worse situation or difficulties for the banks coming from the merger," she argued.
The boards of both BPM and Banco Popolare are meeting on Tuesday and Wednesday to discuss a merger.
According to Italian media reports, a series of capital actions, including a limited capital hike, are being planned in order for the tie-up to meet banking supervisory requirements.
© 2016 AFP