EU shakes up M&A rules in banking sector[de] 

Parliament approved the changes to the directive, aimed to improve the transparency of decisions on banking mergers and acquisitions, in first reading on 13 March 2007, following high-profile cases in Italy, where bank governor Antonio Fazio allegedly abused his position to block a takeover of an Italian bank by Dutch bank ABN Amro.

EU ministers are expected to waive through the changes already approved in informal negotiations, when the Ecofin Council votes on the directive on 27 March 2007.

Internal Market Commissioner Charlie McCreevy welcomed the vote: "It is imperative that legitimate business decisions are not frustrated by over-zealous authorities or by political interference." He added: "It is critical to have clear, fair and predictable procedures and processes."

The text endorsed by Parliament stipulates:

• Five criteria to define if the merger follows "sound and prudent" management: the reputation of the acquirer and management, the acquirer's financial soundness, their willingness to adhere to EU requirements and their involvement in money-laundering or terrorist financing; 
• member states may not impose stricter rules than those already set out;
• changes to the timeline that supervisory authorities should take their decision within, originally set at 30 working days, now 60 working days; and,
• the supervisory authority is allowed to interrupt this period to ask for additional information, but for no longer than 50 days.

Moreover, member states are more generally asked to "co-operate with the Commission by providing information".

In 2004, EU finance ministers had found that cross-border mergers and acquisitions in financial services were much lower than in other sectors. In a report in 2005, the Commission found that the reasons for this stretched from individual reluctance to legal differences between member states.

Commission spokesperson Oliver Dreves says that in the meantime Italy has changed its rules for banking mergers and acquisitions, but the directive proposal was part of a general debate on protectionism. He stated that the speedy adoption of the directive was seen by the Commission as a great success.